22 Jul '14 22:06>1 edit
Citigroup has agreed to pay $7 billion to settle a US government investigation into toxic mortgage-backed securities the bank sold in the run-up to the 2008 financial crisis, according to the US Justice Department.
The settlement marks the end of months of negotiations during which the government reportedly demanded $12 billion and threatened to sue Citigroup.
The Justice Department said in a statement on Monday: “The settlement does not absolve Citigroup or its employees from facing any possible criminal charges.
“Citigroup will pay out the remaining $2.5 billion in the form of relief to aid consumers harmed by the unlawful conduct of Citigroup - including loan modification for underwater homeowners, refinancing for distressed borrowers, down payment and closing cost assistance to home buyers…”
Attorney General Eric Holder said: “This historic penalty is appropriate given the strength of the evidence of the wrongdoing committed by Citi. The bank’s activities contributed mightily to the financial crisis that devastated our economy in 2008.
“We believe the size and scope of this resolution goes beyond what could be considered the mere cost of doing business.”
Banking giant Citigroup will pay $4bn to the Justice Department, the largest penalty imposed to date under the Financial Institutions Reform, and $2.5bn to struggling consumers affected by its practices.
Michael Corbat, Chief Executive Officer of Citigroup, said: “We believe that this settlement is in the best interests of our shareholders, and allows us to move forward and to focus on the future, not the past.”
Citigroup is the second major bank to pay a settlement since an investigation started.
Last November, JP Morgan Chase, the biggest bank in the US agreed to pay a record $13 billion settlement to regulators.
http://euroasianews.com/city-bank-to-pay-7-bn-in-settlement-for-toxic-mortgages/
Has the US government ever successfully prosecuted individuals of a bank on criminal charges of fraud or any other financially related felony? and if not, why not?
The settlement marks the end of months of negotiations during which the government reportedly demanded $12 billion and threatened to sue Citigroup.
The Justice Department said in a statement on Monday: “The settlement does not absolve Citigroup or its employees from facing any possible criminal charges.
“Citigroup will pay out the remaining $2.5 billion in the form of relief to aid consumers harmed by the unlawful conduct of Citigroup - including loan modification for underwater homeowners, refinancing for distressed borrowers, down payment and closing cost assistance to home buyers…”
Attorney General Eric Holder said: “This historic penalty is appropriate given the strength of the evidence of the wrongdoing committed by Citi. The bank’s activities contributed mightily to the financial crisis that devastated our economy in 2008.
“We believe the size and scope of this resolution goes beyond what could be considered the mere cost of doing business.”
Banking giant Citigroup will pay $4bn to the Justice Department, the largest penalty imposed to date under the Financial Institutions Reform, and $2.5bn to struggling consumers affected by its practices.
Michael Corbat, Chief Executive Officer of Citigroup, said: “We believe that this settlement is in the best interests of our shareholders, and allows us to move forward and to focus on the future, not the past.”
Citigroup is the second major bank to pay a settlement since an investigation started.
Last November, JP Morgan Chase, the biggest bank in the US agreed to pay a record $13 billion settlement to regulators.
http://euroasianews.com/city-bank-to-pay-7-bn-in-settlement-for-toxic-mortgages/
Has the US government ever successfully prosecuted individuals of a bank on criminal charges of fraud or any other financially related felony? and if not, why not?