DOJ Demand $10-B From Citi (NYSE:C) Over Mortgage Bonds

Posted by: : Paul EbelingPosted on: June 14, 2014 DOJ Demand $10-B From Citi (NYSE:C) Over Mortgage Bonds

DOJ Demand $10-B From Citi (NYSE:C) Over Mortgage Bonds

The US Department of Justice (DOJ) is preparing to sue Citigroup (NYSE:C) on charges that the bank defrauded investors on billions of dollars worth of mortgage securities in the run-up to the financial crisis, after talks to resolve the probe broke down it was learned late Friday.

A lawsuit could be filed in US District Court in Brooklyn next week, as the bank and civil prosecutors stand far apart in reaching an agreement on the size of any deal.

The settlement negotiations had involved penalty numbers of $10-B or more.

Early Friday, there was a report that the DOJ asked the bank to pay more than $10-B, and that the bank had offered about $4-B.

A Citigroup spokesman declined to comment, also a spokesman for the US Attorney for the Eastern District of New York, declined comment.

The $10-B number for Citigroup was greeted with disbelief by some on Wall St because the bank had marketed fewer mortgage securities than did some other banks.

Reuters reported in December that the US Justice Department was preparing a civil fraud lawsuit against the bank that alleged investors lost tens of billions of dollars on the securities at issue.

US Attorney’s offices in Brooklyn and Colorado have been investigating the bank as part of a larger task force probing faulty mortgage securities that helped fuel the housing bubble in the mid-2000s and contributed to its collapse.

HeffX-LTN Analysis for C:  Overall Short Intermediate Long
Neutral (-0.07) Neutral (0.07) Neutral (-0.15) Neutral (-0.14)

Stay tuned…


Paul Ebeling


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Paul Ebeling

Pattern Recognition Analyst, equities, commodities, forex
Paul Ebeling is best known for his work as writer and publisher of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly-regarded, weekly financial market letter, where he enjoys an international audience among opinion makers, business leaders, and respected organizations. Something of a pioneer in online stock market and commodities discussion and analysis, Ebeling has been online since 1994. He has studied and worked in the global financial and stock markets since 1984.

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