October 26, 2011 Comments (0) Blog, Securities Fraud

Citigroup to Pay $285 Million Settlement for Fraud Case

(Last Updated On: July 17, 2015)

According to the Securities and Exchange Commission they, “charged Citigroup’s principal U.S. broker-dealer subsidiary with misleading investors about a $1 billion collateralized debt obligation (CDO) tied to the U.S. housing market in which Citigroup bet against investors as the housing market showed signs of distress.”

The CDO would default and leave investors with massive losses while Citigroup reportedly “made $160 million in fees and trading profits.” They did this by taking “a proprietary short position against those mortgage-related assets from which it would profit if the assets declined in value. Citigroup did not disclose to investors its role in the asset selection process or that it took a short position against the assets it helped select.”

While not admitting or denying the SEC’s findings, Citigroup has agreed to a settlement to resolve the fraud charges against them. The SEC reports that Citigroup “has agreed to settle the…charges by paying a total of $285 million, which will be returned to investors.”

SEC enforcement director Robert Khuzami had some stern words for Citigroup, he said, “The securities laws demand that investors receive more care and candor than Citigroup provided to these CDO investors.”

If you have concerns about your investment in Citigroup or other CDO’s and would like to speak to a securities attorney about the investments and your potential for recovery you may call our Chicago office at 312/238-9650.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida.

For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.

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