Gay entrepreneur wins battle with Citibank

When entrepreneur Jason Goldberg found out Citibank had deactivated his business account, he did what most people would do: He called, he inquired, he listened. Then he took his fight online.

The tussle resulted in a revised policy at Citi, but also raised a more serious question of free speech – the basis of the First Amendment.

Goldberg’s account was deactivated last week after a review of his gay social networking site – fabulis.com – classified it as “porn.”

The New York-based entrepreneur, who vehemently rejects the “porn” label, said he received no warning prior to his account being blocked and when he first called the bank to inquire, he was told it was due to “objectionable content” on his blog. Goldberg was told the site was reviewed by a Citi administrator who found the “content was not in compliance with Citibank’s standard policies.” Goldberg said he heard the same response from three different Citi representatives.

So what’s a social-media entrepreneur to do? Goldberg began blogging about the issue and including snippets of conversations with Citi officials. The serial entrepreneur, who recently raised $625,000 in seed funding from a round led by The Washington Post Co., said fabulis is a “serious business” and found it hard to believe any content on his blog was so offensive as to merit his bank account being deactivated.

from DealZone:

Lending CIT a hand

An almost heart-warming effort is being mustered by CIT bondholders to keep the troubled lender from getting put under the TARP or stumbling into a much-anticipated bankruptcy. Some $3 billion in survival cash is seen in the pipeline -- money that could strengthen CIT's finances and allow it more time for a debt restructuring. An announcement is expected before the markets open this morning.

What kind of terms might bondholders extract from CIT? Before TARP was modified to target executive pay for those who sought its shelter, banks such as Citigroup and then-independent investment house Merrill Lynch paid what were seen as shockingly high terms on mandatory convertible debt. They were the kind of rates Citi customers paid on credit cards; nothing like traditional bank funding rates.

So, a CIT deal could, and perhaps should, come with a variety of stringent terms. If these are effectively passed on to desperate small and medium-sized businesses that CIT serves, the cost of this rescue could be blamed for stifling the recovery.