Citigroup is close to paying $7 Billion to resolve a U.S. probe to settle a U.S. Department of Justice investigation into whether it defrauded investors on mortgage securities.
Citigroup is close to a settlement worth $7 Billion to resolve the investigation by the U.S. Department of justice into whether it defrauded investors on billions of dollars worth of mortgage securities in the run up to the financial crisis. Most of the settlement is expected to be paid in cash, but the figure includes several billion dollars in relief for mortgage holders.
Far above estimates
The average estimate by analysts on what Citi would pay hovered around $3.4 Billion, but the actual amount is more than double what anyone realistically expected. JP Morgan once paid $13 Billion to settle a similar case, and Bank of America is also in negotiations to resolve similar investigations.
U.S. Attorneys offices in Brooklyn and Colorado have been investigating the bank as part of a larger task force. They probe faulty mortgage securities which helped cause the housing bubble in the mid 2000s and contributed to its collapse. Talks between the bank and the U.S. DOJ stalled last month after both sides stood far apart on a settlement figure.
More information awaited
Both Citigroup and a Justice spokeswoman declined to comment, but an announcement about the settlement could come as early as next week.