To Get Help Now
Click Here
 
Today's Date:

Citigroup to Pay $285 Million to Investors

AddThis Social Bookmark Button

The Citigroup CDO, or collateralized debt obligation deal, marketed in 2007 has brought negligence charges by federal regulators who say the company sold a billion dollar investment product tied to the weakening housing market, without telling investors it was using the product to bet against them. Citigroup has agreed to settle the negligence charges by paying $285 million to investors, though the company did not deny or admit any wrongdoing, the Washington Post reported.

The Securities and Exchange Commission said in court filings that investors “lost several hundred million dollars… while the firm reaped fees and trading profits of ‘at least $160 million.’” The Post said that Citigroup noted in a statement that the SEC did not charge the firm with intentional or reckless misconduct.

The SEC has also charged Brian H. Stoker, a director of the CDO restructuring group, and responsible for structuring the investment, with negligence and said that Stoker knew that the CDO “would operate as a fraud upon the investors.” Stoker is fighting the civil suit.

A spokesperson for Citigroup said that they are “pleased to put this matter behind us and are focused on contributing to the economic recovery, serving our clients and growing responsibly.”

 

breakinglawsuitnews.com disclaimer: This article: Citigroup to Pay $285 Million to Investors was posted on Thursday, October 20th, 2011 at 7:38 pm at breakinglawsuitnews.com and is filed under Fraud Lawsuits.

« »

Leave a Reply

You must be logged in to post a comment.