According to regulatory filings, director Roberto Hernandez bought 6 million shares on March 2 for an average price of $1.25. The stock touched a record low of $0.97 on March 5, but five days later CEO Vikram Pandit issued an internal memo saying the bank turned a profit over the first two months of the year. That news drove Citi shares up 47 percent to its Thursday close of $1.52, giving Hernandez a $1.7 million profit on paper, reports the news agency.
"You're supposed to buy when everyone else is selling," Bruce Foerster, a former Lehman Brothers Holdings Inc. managing director who now runs South Beach Capital Markets in Miami, told Bloomberg. He said banks have internal monitoring systems to keep an eye on executive trades and prevent abuses.
Other executives include Latin America CEO Manuel Medina-Mora, who bought 1.5 million shares on March 3 at an average price of $1.24, Vice Chairman Lewis Kaden with 100,000 shares and controller John Gerspach with 65,000, reports Bloomberg.
In the last year, Citi's stock value has plummeted 95 percent as the company has suffered five straight quarters of losses.
Hernandez said he plans to step down from Citi's board after the bank's annual meeting in April but will keep his non-executive chairmanship of the company's Mexican bank, Banamex, reports Bloomberg.