The Securities and Exchange Commission (SEC) stated in a court document filed Monday that at the start of the mortgage meltdown, investors were misled by Citigroup about a housing-related investment and as a result they lost more than $700 million in the deal. SEC also said that all the investor losses were “not necessarily” the result of misconduct and as such it would accept $285 million from Citigroup to settle their cases against the company.
SEC said that the Citigroup made profits of at least $160 million on the transaction. As per the settlement, Citigroup will have to give up its alleged ill-gotten gains of $160 million and pay interest of $30 million in addition to a $95 million penalty, making a total payment of $285 million. However, Citigroup neither admits nor denies wrongdoing under the proposed settlement. Only one mid-level employee at the subsidiary has been charged in the case and he is fighting the charges.
Better Markets, an advocacy group, has asked for rejection of the Citigroup settlement. Dennis Kelleher, the group’s president, said in a statement that “Unfortunately, the SEC seems more interested in issuing press releases and wrapping up its investigations than punishing Wall Street for its massive frauds. Such settlements don’t deter crime. They reward it.”
Although the settlement is modest in comparison to Citigroup’s third-quarter profit of $3.8 billion, SEC has defended it as “fair, adequate and reasonable.”
Read More : SEC Says Citigroup ‘Misconduct’ Led to Investors Losing $700 Million
SEC said that the Citigroup made profits of at least $160 million on the transaction. As per the settlement, Citigroup will have to give up its alleged ill-gotten gains of $160 million and pay interest of $30 million in addition to a $95 million penalty, making a total payment of $285 million. However, Citigroup neither admits nor denies wrongdoing under the proposed settlement. Only one mid-level employee at the subsidiary has been charged in the case and he is fighting the charges.
Better Markets, an advocacy group, has asked for rejection of the Citigroup settlement. Dennis Kelleher, the group’s president, said in a statement that “Unfortunately, the SEC seems more interested in issuing press releases and wrapping up its investigations than punishing Wall Street for its massive frauds. Such settlements don’t deter crime. They reward it.”
Although the settlement is modest in comparison to Citigroup’s third-quarter profit of $3.8 billion, SEC has defended it as “fair, adequate and reasonable.”
Read More : SEC Says Citigroup ‘Misconduct’ Led to Investors Losing $700 Million
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