Citigroup Judge Asks If $75 Million SEC Settlement Should Require Auditor
A U.S. judge questioned whether Citigroup Inc.’s $75 million settlement with the U.S. Securities and Exchange Commission to resolve claims the bank misled investors by failing to disclose $40 billion in subprime-related holdings should also include future oversight.
The company made misstatements on earnings calls and in financial filings about assets tied to subprime loans as the housing crisis unfolded in 2007, the SEC said July 29 in its complaint. Some disclosures omitted more than $40 billion in investments, the SEC said.
U.S. District Judge Ellen Huvelle in Washington is hearing arguments today from SEC and Citigroup attorneys who have been pushing her for approval, claiming internal policies have been made to assure these violations couldn’t happen again. Huvelle suggested the agreement should include language binding Citigroup to the practices, which might include an independent auditor to oversee regulatory filings.
The case is Securities and Exchange Commission v. Citigroup Inc., 10-cv-01277, U.S. District Court, District of Columbia (Washington).
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