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Monday, July 14, 2014
Citigroup settles with US for $7 billion for its involvement scheme to sell fraudulent securities t
Citigroup settles with US for $7 billion for its involvement
Posted by CotoBlogzz
Rancho Santa Margarita, CA - earlier today, Attorney General Eric Holder announced what he described as " . a landmark civil resolution with Citigroup totaling $7 billion in fines and consumer relief to address the bank’s involvement in a scheme to sell fraudulent securities that were backed by toxic loans. This total includes a civil penalty of $4 billion, the largest penalty to date of its kind."
Among the Department of Justice complaints include that:
despite the fact that Citigroup learned of serious and widespread defects among the increasingly risky loans they were securitizing, the bank and its employees concealed these defects.
It misrepresented the facts, including the level of risk.
It sold defective loans to countless investors, including federally-insured financial institutions. And they made false statements to investors, in marketing materials, and even in documents filed with the Securities and Exchange Commission.
It led investors and the public to believe that these financial products had been originated in compliance with the law and key underwriting guidelines when this was often not the case.
Under the terms of the announced settlement, the bank has admitted to its misdeeds in great detail.
Importantly, this agreement does not in any way absolve Citigroup or its individual employees from facing any possible criminal charges in the future.
Eric Holder stated that " taken together, we believe the size and scope of this resolution goes beyond what could be considered the mere cost of doing business"
Unless certain Citigroup individual bank executives spend the rest of their lives in jail, something that is unlikely to happen, we are sure this agreement IS in fact just another example of the cost of doing business.