By Eleanor Bloxham
October 29, 2012

FORTUNE — Is the SEC investigating former CEO Vikram Pandit’s departure from Citigroup?

The regulator wouldn’t comment on the issue for this article, but that’s what Fox Business reported last Tuesday. The issue, according to Fox’s reporting, is around the timing of disclosure and whose idea it was for Pandit to leave, the board’s or Pandit’s.

Perhaps it was both – and perhaps both were happy with the outcome. Pandit’s October 16 resignation announcement came six months — almost to the day — following the historic no vote by shareholders on the bank’s executive pay. That vote came on the heels of the Federal Reserve’s denial of Citi’s (C) request to raise its dividend.

No doubt the pay vote and the regulatory impasse sent a signal to the board about stakeholders’ views of the bank’s execution. Board members understand that shareholders don’t vote down executive pay if they’re happy with a company’s performance. (Think about Apple.) Mike O’Neill’s ascension as Citi’s new independent chair piled on at the very same time to create a cocktail for change at the firm.

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According to a Citi regulatory filing, John Havens also resigned as president and COO of the company and CEO of the bank’s Institutional Clients Group the same day that Pandit departed. “These resignations occurred after the close of business on October 15, 2012,” the filing stated. Citi’s third quarter earnings conference call was held earlier that day — and the bank announced the exits in an early October 16 press release. Havens had co-founded Old Lane hedge fund with Pandit, which Citi subsequently purchased.

The New York Times has described Pandit’s departure as a choice among three options provided by Mike O’Neill. Pandit could resign immediately, resign at the end of the year, or be fired without cause. He chose the former. Three board members then confronted Havens, according to the report, saying, “Vikram has offered his resignation, and we would like to give you the opportunity to offer yours.”

Given a list of top hot button issues for board deliberation, most directors would not select resignation disclosures. But whether or not there are troubling circumstances surrounding a director or executive’s departure, boards have a duty to ensure that the company’s filings are accurate.

Evaluating the facts surrounding contentious resignations is no simple task. HP’s (hpq) exit disclosures when Tom Perkins stepped down from the tech giant’s board are a case in point. In that case, under SEC Chair Chris Cox’s watch, the SEC mangled its assessment of those disclosures, blaming the company after Tom Perkins’ explanations for his departure changed over time.

Given what we know so far, though, the board and regulators should take a close look at board oversight and disclosures concerning the changes in ownership at Citi Capital Advisors (CCA), which has over $18 billion in assets under management. “Citi has begun transitioning certain CCA businesses from being wholly Citi-owned to being owned primarily by management,” a Citigroup spokesperson confirmed in an email to me, after reports of a “carve out” by Bloomberg. “The CCA business reported into John [Havens] as head of the Institutional Clients Group,” the spokesperson wrote me in a subsequent email. “The new co will be owned by its management team (Jim O’Brien and Jon Dorfman and other fund managers) but not including Havens.”

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Citi’s spokesperson would not comment on the board’s involvement in this matter, noting there was “a definitive agreement” for the ownership change but that it was “pending close.” Further, “comment about the terms of the deal [can not be made] as the negotiations were private,” the spokesperson wrote me. “There was no earlier public announcement.”

The board of any company ought to keep a close eye on deals with top managers that involve company assets. They should ensure that the deal is a fair and reasonable transaction, that it’s in the best interests of the company and all of its shareholders and stakeholders, and that disclosures are appropriate and accurate. Enron ran into the buzz saw with its side arrangements with then-CFO Andrew Fastow. And this year, Chesapeake came under fire because of its highly unusual arrangement with its CEO’s stake in the company’s drilling operations.

Given Citi’s history with similar negotiations, the situation warrants attention. Citi forked over $800 million for underperforming Old Lane, $165 million of which Pandit pocketed, according to the New York Times.

While it’s possible that some members of Citi’s board were in the dark about the CCA transaction, several employees have known about the deal for some time. John Havens, for one, along with Jon Dorfman and Jim O’Brien, wrote a memo to colleagues on February 16 about the arrangement, according to Citigroup’s spokesperson.

It’s time to move beyond internal memos and speculation. Citigroup, it’s time to start talking.

Eleanor Bloxham is CEO of The Value Alliance and Corporate Governance Alliance (, a board advisory firm.

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