Citi to pay $7 bln to settle U.S. mortgage securities probe
Monday, July 14, 2014 - 00:57
Citigroup has agreed to pay $7 billion to settle a U.S. investigation into shoddy mortgage-backed securities the bank sold in run-up to the financial crisis. Rough Cut (no reporter narration).
▲ Hide Transcript
▶ View Transcript
ROUGH CUT (NO REPORTER NARRATION)
STORY: Citigroup has agreed to pay $7 billion to settle a U.S. investigation into shoddy mortgage-backed securities the bank sold in the run-up to the financial crisis, including the largest civil fraud penalty ever levied by the U.S. Justice Department.
The settlement is more than twice what many analysts had expected but less than the $12 billion the government sought in negotiations with Citi, the third largest U.S. bank.
The settlement, signed over the weekend, capped months of negotiations, during which the government threatened to sue the bank, sources said.
"The penalty is appropriate, given the strength of the evidence of the wrongdoing committed by Citi," U.S. Attorney General Eric Holder said in a statement on Monday.
"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," Holder added.
Citi said it will pay $4.5 billion in cash and provide $2.5 billion in aid to low-income tenants and struggling homeowners.
Press CTRL+C (Windows), CMD+C (Mac), or long-press the URL below on your mobile device to copy the code