Trump Presses Fed’s Cook to Quit After Mortgage Fraud Allegation

26:32And they've become, you know, the predominant launch provider for NASA and the U.S. government. So, you know, I will never say that SpaceX can't do something that it sets out to do. So maybe that is a roundabout way of answering your question. It works for me. Lauren Grush, Bloomberg News space reporter. Thank you so much. Again, that was Grush on her article with Keel Porter about Musk's races to finish SpaceX Starship after failures and explosions. Stay with us. More from Bloomberg Businessweek Daily coming up after this.

27:13This is the Bloomberg Tech Minute brought to you by ChatGPT. Now with ChatGPT work. I'm Carol Masser. Globetrotters hunting for airfare bargains are in for a rude awakening. as the days of stumbling across a cheap seat on a popular flight could soon disappear. Bloomberg's Wan Ha reports that airlines from Delta to Virgin Atlantic are adopting artificial intelligence to change seat prices more quickly by weighing dozens of variables in real time, helping capture more revenue while shrinking pricing gaps that once allowed travelers to find bargain fares. Machine learning models can more accurately forecast demand by analyzing historical booking patterns, seat inventory, and seasonal trends, while also continuously tracking competitors' fares and capacity changes to update prices in near real time.

28:00The technology could lead to higher fares on busy routes as airlines pack flights closer to capacity, but may also result in lower fares on off-peak and lower-demand routes. That's the Bloomberg Tech Minute brought to you by ChatGPT. Put ChatGPT to work on your most ambitious ideas and projects. Get started at ChatGPT.com today by selecting Work Mode. available on Plus and Pro Plans.

28:53go-to market efforts. Elevate your wins with Adio. Start your free trial at adio.com slash iHeart. Aging is real, and so are the benefits of adding Vital Proteins Collagen Peptides to your daily routine. New Vital Proteins Collagen Sparkling Water. Your daily glow-up now in three fresh flavors. Strawberry blossom, lemon lime, and blood orange. Improved skin health in as little as 30 days thanks to collagen peptides. Cheers to that, or go with our classic collagen peptides, so you can stay vital, stay you. Visit vitalproteins.com to learn more and where to buy. These statements have not been evaluated by the Food and Drug Administration.

29:27This product is not intended to diagnose, treat, cure, or prevent any disease. The thing about AI for business, it may not automatically fit the way your business works. At IBM, we've seen this firsthand. But by embedding AI across HR, IT, and procurement processes, we've reduced costs by millions, slash repetitive tasks and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business, IBM. This is the Bloomberg Business Week Daily podcast. Listen live each weekday starting at 2 p.m.

30:07Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa, play Bloomberg 1130. It is one of the most read stories on the Bloomberg terminal today. It's about Citigroup hiring the firm Paul Weiss to investigate complaints about the behavior of the bank's wealth management chief, Andy Sig. He was brought in by chief executive Jane Fraser on a high profile hire to drive a key part of her turnaround plan. Joining us now is Todd Gillespie, U.S. finance reporter for Bloomberg News. He joins us here in the Bloomberg Interactive Brokers studio.

30:46Andy Sieg, who is he? Well, Tim, yeah, I mean, Andy Sieg was brought on in September of 2023 by Jane Fraser to, you know, really lead a pillar of what everyone knows really is one of Wall Street's biggest turnaround stories right now. Citigroup, one of the laggards on Wall Street, one of the least profitable big banks, has really struggled to keep pace with its rival over the years. And building a wealth management franchise that could compete with the likes of Morgan Stanley, JP Morgan, that has been a big task for Jane Fraser and a big priority for her. So she makes this star hire, this man who ran Merrill Lynch or Merrill as it's now known for six years as part of Bank of America.

31:23He comes over and obviously a lot then happens. But he has overseen so far some positive changes for the business. The, you know, it has posted record revenues along with the rest of the US wealth management sector as wealth management generally has been doing very well. But he has implemented a lot of key changes that have been welcomed by investors. But crucially, we now find out he's also done it at some cost to perhaps morale and human capital and the ways in which he's been treating people internally have raised some big red flags at senior management level. And we know that the head of human resources at the bank asked White Shoe law firm Paul Weiss to come in and investigate these claims.

32:06We know that this investigation has finished. The bank has declined to comment on its outcome. So we don't actually know what they found, what they concluded, whether there were any repercussions, for instance. But the bank so far is standing by him. What has your reporting shown so far about just Sieg's management style and what could have potentially led to that Paul Weiss investigation? Right. We know that he's sidelined and intimidated senior female executives, one of whom, Ida Liu, was one of the most high profile female executives at Citigroup. She was there for 18 years until she left the bank.

32:40I've interviewed her many times. Indeed. Yeah. I mean, she left the bank suddenly in January. A lot of people were still wondering what the real story was there. And this seems to be at least part of that. We know that he called people's work pathetic in rooms, launched into expletive filled rants against them. He made a male managing director cry and banged his fist on the table. And yeah, so it seems to be, you know, this isn't just sort of old school Wall Street necessarily. It seems to be, and particularly in 2025, you know, this sort of seems to be another level of, you know, what some people might argue is toxic behavior.

33:17I want to bring up a response from Citi. This is according to a Citigroup spokesperson. You can see it on the screen if you're watching us on Bloomberg Originals or on YouTube. It is, quote, it is standard practice for us to engage an outside law firm to investigate allegations made against a senior member of the management team to ensure independence and prevent even the appearance of a possible conflict of interest. This is according to a Citigroup spokesperson. What else did you hear from the bank? Is that it? Well, the bank is standing by him and they are highlighting that, you know, at least 40 more than 40 percent of his leadership team are women.

33:56You know, they mentioned that he has driven positive results and that he apparently continues to attract, you know, leading talent from outside the bank. So that that really is the bank stance right now. Again, they've declined to comment on the specifics of the investigation or the outcomes. But but, you know, what we've reported is, you know, is there. And, you know, it's unclear exactly how this might develop longer term and what this, you know, whether there might be any other impacts. But for now, it seems like the bank is standing by him. It's interesting you write in your article that while it's not entirely clear which allegations were reviewed by Paul Weiss, at least six Citigroup managing directors made complaints.

34:38That stands out to me because that number six is is is a lot. And it's at the MD level as well. This is that's the most senior position you can have at a big bank like this. That's right, Emily. And it's also worth noting that a large focus of some of these complaints was his treatment of a woman called Kristen Bitterly, who's also been on Bloomberg TV repeatedly herself. She runs the Wealth at Work division, which is one of the three core businesses of the wealth business at Citi. So she's a direct report, I guess, one of the three P &L heads underneath Andy Sieg. She is still at the bank. She is still running that business.

35:14And, you know, and we know that there were complaints over his treatment of her. So there is still perhaps one might say ongoing tension and ongoing questions about the relationship of senior executives here, which haven't yet been answered. Paul Weiss did not respond to requests for comment. Ida Liu did not decline to comment, I should say, when reached by Bloomberg News. And then Kristen Bitterly, who you just spoke about, remains at the bank. She didn't respond to requests for comment either. I Todd back out a little bit and talk a little bit about the role of wealth management at the firm especially under Jane Frazier the goals there and how successful it's been yeah I mean well Citigroup uh traditionally I mean it's been known as one of the most global banks right we have the private bank which caters to particularly super high net worth you know individuals with global footprints they might have you know assets across the world Citi's private bank is quite big in Asia in particular.

36:09In the US, their market here, they're trying to, I guess, become a bit more of a wire house, a bit more of a merrill. They're trying to focus on a slightly more mass affluent market, bring in more investment assets that way. And they're also trying, interestingly, to reduce dependence on the balance sheet. They're trying to lend less. And we all know, you know, big banks right now, capital constrained, and Citi in particular, as well as trying to find ways around that. How do you make revenue without lending? What are the best ways of doing that? In their banking business, for instance, they're sending more deals to Apollo through a private credit partnership that they have now.

36:46In the private bank, they're trying to reduce how much money that they are lending to billionaires or the intensity of that, at least. And instead, they're trying to get more revenue by getting up-and-coming emerging wealth to come on board at Citi and to invest more money through the firm's platform. You had mentioned, you know, that this hire of Sieg was was part of a turnaround. Does how do you anticipate this ends? I know we you know, there's still a lot of information that's that's unknown. You look at the shares of Citi, they did drop as much as 3 % today, but now they're down less than 1%.

37:23What are the implications? Does this impact that turnaround story at all? these days yeah i mean it's i mean it's obviously unclear how this might affect things like his ability to hire talent um and you know confidence in his leadership for instance but you know it's hard to speculate right now and obviously we should refrain from doing that too much um you know for now you know the wealth business has posted solid returns you know city group will be posting uh results for the um you know for the next quarter in in october um so we'll see how the wealth business performs then um but for now you know the wealth business at city is the smallest of the five businesses.

37:59It's growing rapidly. And, you know, we'll sort of see how that pans out, really. Todd Gillespie, U.S. finance reporter for Bloomberg News, joining us here in the Bloomberg Interactive Brokers Studio. Check out his story. It's on the Bloomberg Terminal. It's the most read or among the most read stories on the Bloomberg Terminal today. City investigated HR complaints against the wealth head Sieg. Stay with us. More from Bloomberg Businessweek Daily coming up after this.

38:33This is the Bloomberg Tech Minute brought to you by ChatGPT. Now with ChatGPT Work, I'm Carol Masser. Globetrotters hunting for airfare bargains are in for a rude awakening, as the days of stumbling across a cheap seat on a popular flight could soon disappear. Bloomberg's Juan Ha reports that airlines from Delta to Virgin Atlantic are adopting artificial intelligence to change seat prices more quickly by weighing dozens of variables in real time, helping capture more revenue while shrinking pricing gaps that once allowed travelers to find bargain fares. Machine learning models can more accurately forecast demand by analyzing historical booking patterns, seat inventory, and seasonal trends, while also continuously tracking competitors' fares and capacity changes to update prices in near real time.

39:20The technology could lead to higher fares on busy routes as airlines pack flights closer to capacity, but may also result in lower fares on off-peak and lower-demand routes. That's the Bloomberg Tech Minute brought to you by ChatGPT. Put ChatGPT to work on your most ambitious ideas and projects. Get started at ChatGPT.com today by selecting Work Mode, available on Plus and Pro Plans. Everyone's talking about how AI is transforming work, especially in sales. While the landscape shifts, one thing remains the same, the thrill of closing a deal. Whether it's a gong or a confetti machine, every team has its celebration rituals.

39:59Adio is designed for that moment. It's the agentic CRM that turns customer signals into actionable insights, helping you close deals faster with revenue agents and automations working around the clock. You'll have everything you need to scale your go-to market efforts. Elevate your wins with Adio. Start your free trial at adio.com slash iHeart. Aging is real. And so are the benefits of adding Vital Proteins Collagen Peptides to your daily routine. Because around the age of 30, your body needs backup to keep your collagen up. To help support healthy hair, skin, nails, bones, and joints. Available in the classic collagen peptides.

40:34Collagen and protein shakes. And new Vital Proteins Collagen Sparkling Waters. So you can stay vital, stay you. Visit VitalProteins.com to learn more and where to buy. These statements have not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure or prevent any disease. So there's a lot of noise about AI, but time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now, a global workforce of 300 ,000 can use AI to fill their HR questions, resolving 94 % of common questions.

41:08Not noise. Proof of how we can help companies get smarter by putting AI where it actually pays off. Deep in the work that moves the business. Let's create smarter business. IBM. You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from 2 to 5 Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business App. Or watch us live on YouTube. I want to talk fintech, financial technology, Chime Financial. It's a prominent fintech, recently IPO'd. The stock actually fell below its IPO price of$27 for the first time. 69 days after going public, this is traders' dump shares of fintech companies during a sell-off in U.S.

41:51equities over the last couple of days, today included. We see SoFi Block, a firm, selling off yesterday and today as declines in big tech stocks push major indexes lower. I want to bring in David Haver. He watches this stuff closely. He's general partner at the VC firm Andreessen Horowitz. It's perhaps among the most well-known in the world, having made early bets on Airbnb, Coinbase, Facebook, when it was called Facebook, Instagram, Figma, Lyft, Slack, Affirm, Skype, and more than 700 other companies. Also joining us, someone else who watches fintechs closely, Paige Smith. She's consumer finance reporter for Bloomberg News.

42:24Everybody is here in the Bloomberg Businessweek studio. David, I want to start with you. The fintechs I mentioned, Chime, SoFi, Block, Affirm, one of which Andreessen Horowitz has invested in. Yep. How do you think about these in the context of where we are in fintech? Is this like a sort of web 1.0 in where we are with fintech? It's a great question. I think, you know, we were chatting about, Paige and I were chatting about this earlier. You know, I think a lot of fintech from, you know, call it 2012 to 2018 were these style of companies. These were businesses that lead with a financial product.

42:57And they got started by really unbundling the bank, you know, kind of building a wedge, whether it's a trading product or a fee-free mobile first bank account. in Chime's case. And as they've scaled, they've kind of re-bundled product to try to become the primary sort of financial relationship with their end customer. I think where I've been spending time and, you know, I used to run a lending business, which, you know, wasn't a direct competitor with these, but was a very challenging, you know, company to lead, has been different, right? The types of fintech companies that I look for and most like investing in are those that lead with software or have the potential for a network effect, right?

43:28So often selling into large financial institutions as opposed to trying to compete with them directly. And it's been one of the things that I've been spending time the last four years here at Andreessen is just trying to bridge the gap between what's happening on the frontier in the startup ecosystem and many of these large financial institutions. You know, David, I have a question for you as well about one of the companies that we chatted about, which is Plaid, and kind of this interesting dynamic right now around charging. There were theoretically the negotiations are ongoing, discussions are ongoing, and the regulatory environment is a little bit uncertain right now.

44:03But the idea of charging for access to customer financial data, it was kind of an issue that was settled for a hot minute and has now sort of come back. I guess I would be curious about your, from your perspective, how does this discussion of kind of the banks sort of essentially like digging these moats around themselves to charge for this financial data? What are your thoughts on this? Yeah, so look, JP Morgan came out recently saying they wanted to charge the FinTech ecosystem, I think,$300 million for access to consumer data. and it was done under the auspices of consumer protection and their own kind of cost structure to support this information.

44:46I think it's really just hiding the true intention, which is sort of an anti-competitive move. Ultimately, Plaid, which again, in full transparency, helped seed the company back in 2013. And recent, we're large investors in the business. So I have a strong point of view here, but Plaid ultimately sits at the intersection between the bank, a fintech application, and the end customer. right? And so they do play this sort of intermediated role. But ultimately, I think it's who owns this information, right? JP Morgan has a strong point of view that they own the information. I believe that consumers own their own data.

45:22And then we need more open kind of standards, you know, for how people are able to share their own information with other, you know, third-party applications. The analogy that I use often is, you know, do you own the photos in your iPhone or does Apple, right? Should Apple be able to charge Instagram for you authenticating access to your photos? I don't think so, right? I think you ultimately own, you should be able to share your photos with any application that you want to connect to. And JP Morgan is basically saying, no, your photos are mine. And we're going to be able to charge their Instagram equivalent$300 million for access to your information.

45:57I just don't think that's fair. And I think it's, again, I think it's veiled under this sort of threat of, you know, consumer protection and their own cost structure. The reality is, you know, data infrastructure costs have come down so precipitously. And we're talking about your account and routing number, right, in your transaction history. It's really not that sort of technology intensive. And for many, you know, banks, they don't actually have real-time APIs, right? And so for the long tail of community regional banks, I think Plaid plays an even more important role in becoming this sort of like data utility and enabling kind of this ecosystem of fintech companies to build interesting applications on top of those products.

46:33Aside from Plaid, are you seeing investing opportunities that kind of capture that theme of perhaps consumers getting their rights to whether it be data, finances, or maybe even iPhone photos back? It's an interesting question. I mean, there's a lot happening kind of in consumer fintech broadly. And I think, you know, AI is sort of changing the conversation here in a lot of ways. Maybe it's a different answer to your question, but my partner Alex recently announced an investment in a company called Salient, which has launched voice agents for auto loan servicing. And what's interesting in this capacity is these are large non-bank and bank auto lenders that have very large armies of call center folks now using voice agents who can speak in 50 languages, 24-7, fully compliantly in many of these markets.

47:28And so I think it's an interesting question of how is sort of technology and the software actually doing the work and how is that changing the relationship with, you know, with the end customer. And so that's, I think, one of the bigger themes that we're seeing in consumer finance. There's a lot happening also in the back office, you know, in many of these bigger financial institutions. You know, I want to talk a little bit about it's funny. You don't necessarily think of venture capital and politics until like the 2024 election. And I think Andreessen Horowitz really find itself at the center of the political ecosystem right now.

47:58Mark's very close with the Trump administration. He's advised President Trump. He's been outspoken with his support. The firm hired Daniel Petty after his acquittal. I think people would say that's political there. Andreessen Horowitz's very first hire, Scott Cooper, now a month into his gig as HR chief for the federal government. We had some reporting recently on the Bloomberg terminal, Riley Griffin, noting that Scott was introduced to Commerce Secretary by Mark and Ben. And what is, you know, this connection to a relationship with the Trump administration? How do you feel about that in the sense of, like, having a direct line to the administration or a direct line to Washington, given Andreessen Horowitz's involvement in this administration?

48:42Look, I think from a macro perspective, you know, 15 years ago, technology was sort of this industry that existed, you know, only in Silicon Valley. It was sort of not part of the conversation in D.C. It wasn't really a conversation in most industries. Mark famously wrote this essay, Software is Eating the World. I think that's happened, right? Technology is now proliferated across every industry in our society, in our economy, and as a result is directly impacted by DC and the regulatory environment. And so I think their point of view is not, it's really not partisan. I know that there's a lot of headlines that have happened from the presidential election.

49:18But fundamentally, I think our view is we want to support what we call the little tech agenda. We want to, you know, back the on both sides of the aisle, people who support innovation and support sort of technologies advancement. So we've donated to, you know, Democrats and Republicans in support of this issue. Well, do you feel like you have a more direct line now than you did during the Biden administration? Certainly, I think as a firm, we've taken a much more front leaning approach. I think Mark and Ben and others at the firm tried to spend a lot more time, you know, in the prior administration.

49:48I think that was part of what governed their decision to be more vocal in this presidential election. I think it's important in general to have a dialogue with D.C. Because, again, I think technology has just permeated every part of society. And you have the largest technology companies with massive lobbying arms in D.C. There is sort of this tragedy of the commons challenge in the startup ecosystem and in the French ecosystem because it's highly fragmented. These are relatively small institutions. And so I think their belief is, you know, if not us, then whom? And so I think we're trying to be sort of a convening force in creating a voice for this tech ecosystem, again, to drive innovation and ultimately, I think, better outcomes for society, for the economy, et cetera.

50:29We're speaking with David Haber, general partner at the venture capital firm Andreessen Horowitz. And, you know, David, I have another question for you. I cover consumer finance here at Bloomberg. And, you know, we did just see the Chime IPO. We've seen a number of sort of consumer facing fintechs do quite well in the last couple of years. And kind of there are these sort of household names, frankly, that you and I use for a lot of our corners, a lot of corners of our financial lives. Robinhood comes to mind as well. But, you know, I guess I'm curious, like, are we is consumer fintech dead? Like, are we kind of shifting to a lot of these, you know, like we mentioned a few names earlier of kind of infrastructure companies, financial services, infrastructure companies where it's still fintech for sure.

51:12but it's not like FinTech that you and I would know the name of or see the brand. You know, we might see the ads on the subways, but we don't interact with them. What are your thoughts? Yeah, look, I think part of it is just like how the market has evolved, right? When many of these companies started in, you know, 2012, like early 2010s, many of the largest banks didn't have mobile banking products, right? Many of them weren't acquiring customers online. And so it was much easier, you know, candidly to launch with the wedge product, to spend money and acquire customers and build in a much larger user base.

51:44I think the challenge over the past several years is like CAC is the new rent, right? A lot of that spending has now gone to the largest technology platforms to help these big institutions acquire their own customer. And it's just become a lot more competitive. It's much more difficult, I think, to break through and compete now directly with a Robin Hood or a Chime or a SoFi, et cetera. It's one of the reasons. I think there are other reasons culturally within these financial institutions, their willingness to leverage third-party technology has changed dramatically in the last five or six years.

52:13And as a result, made it much more interesting to back software-led companies and infrastructure companies selling into these institutions to, again, solve real problems, change their workflows. And I think that part of the kind of more B2B side of the market has become more interesting, at least to me. David, we only have 30 seconds left. What is the most interesting company that you've made an investment in that our audience hasn't yet heard of that should be on their radar? Oh, there's a bunch, but it's hard to pick. Page wrote a great article on a company called Moment that is building fixed income trading infrastructure.

52:43And so again, kind of a wonky part of the world. But if you're a wealth management client, getting a bond ladder is still a manual process today at most large financial institutions. Soon that'll be done programmatically. I think this is a company, albeit more infrastructure, that's going to become much more well known over time. You're a man who knows his audience. We can talk about bond ladders and bond infrastructure all day here on Bloomberg. David Haber, general partner at the venture capital firm Andreessen Horowitz, also with us, Paige Smith. She is consumer finance reporter for Bloomberg News.

53:14This is the Bloomberg Business Week Daily podcast, available on Apple, Spotify, and anywhere else you get your podcasts. Listen live weekday afternoons from 2 to 5 p.m. Eastern on Bloomberg.com, the iHeartRadio app. Tune in and the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg Terminal.

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54:20Policies provided by Hartford Fire Insurance Company and its property and casualty affiliates, Hartford, Connecticut. Everyone's talking about how AI is transforming work, especially in sales. While the landscape shifts, one thing remains the same, the thrill of closing a deal. Whether it's a gong or a confetti machine, every team has its celebration rituals. Adio is designed for that moment. It's the agentic CRM that turns customer signals into actionable insights, helping you close deals faster with revenue agents and automations working around the clock. You'll have everything you need to scale your go-to market efforts.

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