When it emerged a few weeks ago that the codename for a daring $13bn (£6.8bn) bond trade in Citigroup's London office last summer was "Doctor Evil", it must have been much more than exasperation felt by the chief executive of the giant bank, Chuck Prince.
When it emerged a few weeks ago that the codename for a daring $13bn (£6.8bn) bond trade in Citigroup's London office last summer was "Doctor Evil", it must have been much more than exasperation felt by the chief executive of the giant bank, Chuck Prince.
The grand strategy - to flood the European bond market and then rebuy at a lower price - had overtones of another fiendishly clever plan: the time when the top brains at Enron, using special vehicles known as "Deathstar" and "Ricochet", took advantage of electricity blackouts in California to hike energy prices. Or maybe the Citigroup traders were thinking of their colleagues in Italy, who named a deal they struck with doomed food group Parmalat as "Bucerono" - black hole.
So far at least, no regulators have said the bank broke the law with "Doctor Evil". But it prompted criticism from the City watchdog, the Financial Services Authority, and its counterpart in Germany, and Mr Prince himself pronounced the trade "a completely knuckle-headed thing to do", even though it netted millions of dollars in profit for the bank.
The incident is one in a series of recent brushes with regulators, the most serious of which came last September when Japan's Financial Services Agency ordered Citigroup to close its entire private banking operation because it had violated the country's financial rules. This led to the departure of two of its most senior executives. And just last week the bank's senior representative in China was forced to quit over allegations she had forged a letter.
Mr Prince, a trained lawyer and veteran of the bank, sent a memo to all corners of his empire last week containing a five-point plan to make it a more responsible, unified place. "We must put Citigroup's long-term interests ahead of each unit's short-term gains," he said.
Laying out ways to increase internal controls, assess managers more thoroughly and link pay and bonuses to the performance of whole teams rather than particular individuals, he added that Citigroup needed to "share the responsibility for our successes, and accept accountability for our failures".
Chief among the changes will be an "ethics hotline", which staff will be able to dial to give anonymous information about colleagues. Employees will also be shown a documentary, The Story of Citigroup, so that they understand its culture and values. Internal controls needed to be strengthened, "to minimise mistakes and to ensure that, when mistakes occur, they are handled appropriately", Mr Prince said.
While no one on Wall Street questions Mr Prince's integrity, quite a few doubt his ability to implement the plan throughout the bank, the world's largest financial services provider with 300,000 employees. Critics say it is too sprawling, and that it contains too many firms brought together by acquisition for its senior management to impose the uniform culture of cast-iron ethics and strict regulatory controls desired by investors in the wake of corporate scandals such as Enron.
Merrill Lynch analyst Guy Moskowski summed up the sentiment when he said Citigroup had a culture of focusing on relentless profit growth without enough concern for how those earnings are made.
More worryingly for the bank, its largest shareholder - the Saudi billionaire Prince Alwaleed bin Talal - expressed dismay about some of its troubles. Prince Alwaleed, who has lost $900m in the past year alone on his stake in the bank, said: "Citigroup's big successes have been clouded by events here and there, such as the one in Japan and the bond market in Europe."
A senior employee of a rival bank said: "It is all about judgement. We don't get it right all the time, but we learnt a lot from all the wrong-doing that happened during the bubble in 2000. Their bond trade was just last year, and there really should have been alarm bells ringing."
While senior managers at Citigroup deny they knew anything about "Doctor Evil", Mr Prince has implemented an investigation and suspended the traders involved. He has also been on a tour of his far-flung operations, including in Japan, where he performed a deep bow of apology to its regulators.
On a more positive note, he said in his memo he would hold "town hall" style meetings twice a year with staff to encourage them to ask questions, and to allow him to extol the Citigroup culture in person.
It might be a tall order, but so far he has the confidence of Prince Alwaleed, who said: "The firmness of Chuck Prince has been proven beyond any doubt. Any action he takes, we'll back him up."
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