Proposed Citi settlement is fair by Barbora Misakova

When the crisis hit, first of all we thought about money. What else should we think about? United States had a lot to do to save its banks from bankruptcy. New-York based Citigropu was one of the hardest-hit banks during this financial crisis. That was also the reason why it received $45 billion from the $700 billion financial bailout. This amount was among the largest of the government rescues. In December, Citibank repaid $20 billion of the bailout and the other $25 billion was converted to a government ownership stake, which the government has said it will sell by the end of this year. But Citibank is on the carpet again. This time the question of “fair and adequat! e” punishment of Citigroup Inc. is relevant. Citigroup Inc., which misled investors about billions in potential losses from subprime mortgages, got from government penalty of $75 million. The third-largest U.S. bank was accused of repeatedly making misleading statements in calls with analysts and regulatory filings about the extent of its holding tied to high-risk mortgages. The SEC announced the settlement of unintentional civil fraud charges in late July, but U.S. District Court Judge Ellen Segal Huvelle, who said last month she was “baffled” by the proposed settlement, was not ready to approve it without more information. The Securities and Exchange Commission made its case in a filing Wednesday and said the $75 million penalty is “fair, adequate, reasonable and in the public interest.” The SEC also said that the proposed $75 million fine also fully conforms with the agency’s guidance for corporate penalties and was based on an economi! c analysis of Citigroup’s estimated gain.

relate! d story (sgx18171): http://news.yahoo.com/s/ap/20100909/ap_on_bi_ge/us_sec_citig...

by Barbora Misakova for Cantell TV (http://cantell.tv)

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