Citibank Backpedals on Shutting Down Account for Gay Website Owner (NYSE: C)

Citibank (NYSE: C) executives backpedaled after a low-level Citibank executive froze an account associated with a gay website, stating that the account did not meet Citibank’s standard policies.

Jason Goldberg, a Stanford MBA that runs the gay adult start-up website “fabulis”, had his website shut down by Citibank without any explanation. He discovered that the company’s cash account had been locked by the company. Citibank initially un-froze the account upon Goldberg’s request, but upon re-review, a low-level Citibank executive in its compliance department said that fabulis.com’s content was “content was not in compliance with Citibank’s standard policies.”

The website had raised over $600,000 from a number of investors including the Washington Post before the account was shut down. No pornography or profanity was included on the website. The website’s primary feature is home-made YouTube style videos of men describing why they are “fabulis.”

After the story became public, Citibank quickly retreated from its request for the company to terminate its account at the bank. A Citibank spokesperson said that the individuals that told Goldberg his website’s content was objectionable had been “mistaken.”

Goldberg stated late in the day on Thursday that Citibank had issued a “good and sincere policy”.

In an apology letter to Goldberg, Citibank said that “Whatever statements that were made by any Citi representative related to the content of your website were inappropriate and made in error, and I will review in detail what happened. You have my firm commitment on this point.”

Update 2:20 PM:

Jason Goldberg has posted an update on his blog.

Citibank also made the following public apology, “Citibank sincerely apologizes to Mr. Goldberg for this misunderstanding. This situation had nothing to do with the content of his web site and any comments by our staff to the contrary were incorrect. This was a technical issue about missing documentation that is required for new business accounts. Once we resolved the situation, we unblocked the account immediately. Mr. Goldberg is a valued customer and we appreciate his business. Also, Citi is strongly committed to diversity, including support for the gay, lesbian, bisexual and transgender community, and other organizations promoting diversity. In fact, this week Citi has announced the financing for the True Colors Residence, a housing facility for homeless GLBT youth in New York City.”