NEW YORK, Aug 6 (Reuters) - A federal appeals court on

Tuesday said a Citigroup ( C/PN ) vice president was not entitled

to a share of a $400 million civil fine that the bank agreed to

pay in October 2020 over its risk management failures.

The 2nd U.S. Circuit Court of Appeals in Manhattan said

Tamika Miller did not show that her whistleblowing over

Citigroup's ( C/PN ) alleged altering of audit reports obligated the bank

to pay a penalty, leading to its settlement with the Federal

Reserve and the Office of the Comptroller of the Currency (OCC).

Miller said Citigroup's ( C/PN ) conduct violated its $700 million

settlement in 2015 with the Consumer Financial Protection Bureau

over its credit card business, and its $35 million settlement

the same day with the OCC over its marketing practices.

However, Circuit Judge Denny Chin, writing for a three-judge

panel, said that federal law gave the OCC discretion, but not an

obligation, to fine Citigroup ( C/PN ) over the audit reports. He said

that doomed Miller's accusation that the third-largest U.S. bank

hid its compliance failures to avoid a fine that the government

was entitled to collect.

Chin also said that the lawsuit by Miller, a Citigroup ( C/PN ) risk

management employee since 2014, was "bereft of the details

needed to provide Citibank with 'fair notice' of her claim, and

instead resembles an attempt to use the litigation process to

discover hypothetical wrongdoing."

Lawyers for Miller did not immediately respond to requests

for comment. Citigroup ( C/PN ) did not immediately respond to similar

requests.

Miller sued under the federal False Claims Act, which lets

whistleblowers sue on behalf of the government and share in

recoveries, typically 15% to 30%.

Such cases typically argue that companies received money

they weren't entitled to. Miller's case was a "reverse false

claim" contending that Citigroup ( C/PN ) kept money it should have paid.

Jane Fraser, Citigroup's ( C/PN ) chief executive, has made cleaning

up the New York-based bank's regulatory failings a top priority

since taking over in March 2021.

The case is U.S. ex rel Miller v Citibank NA, 2nd U.S.

Circuit Court of Appeals, No. 22-1615.