Citigroup to Settle Mortgage-Bond Probe for $7B

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July 14 (Bloomberg) -- Citigroup agreed to pay $7 billion in fines and consumer relief to resolve government claims that it misled investors about the quality of mortgage-backed bonds sold before the 2008 financial crisis. (Source: Bloomberg)

For the recalls.

Too little too late for summer box office success?

That is coming up in movies.

Kicking it off with them -- with what everyone is talking about, the fed.

Today the justice department obtained a landmark civil resolution with citigroup totaling $7 billion in fines and consumers to address the bank's involvement in a scheme to sell fraudulent securities who were backed by toxic loans.

Citigroup the latest major financial institution to pay up for misleading investors about the quality of mortgage-backed bonds sold before the 2000 eight financial crisis.

Included a civil penalty of $4 billion, the largest to date of its kind.

Eric holder read a laundry list of bad behavior.

Here it is.

Despite the fact that citigroup learns a serious and widespread defects among be increasingly risque loans they were securitizing, the bank and employees concealed the defects.

They misrepresented the facts, including the level of risk.

They sold defective loans to countless investors, including federally insured financial institutions and made false statements to investors in marketing materials and even documents filed with the securities and exchange commission.

They left investors and public leave the financial products originated in compliance with the law and key underwriting guidelines and this was often not the case.

The bank's misconduct was egregious, and under the terms of the settlement, the bank has admitted to misdeeds in great detail.

The bank's shattered lives and livelihoods throughout the country and the world.

It contributed to the financial crisis that devastated the economy in 2008. sounds bad.

Obviously a big penalty for citigroup and the stock jumped four percent out of the open.

Why?

Estimates of course as you take out the 3.7 billion set aside for the mortgage settlement.

Be the estimate by $.13 per share on an operating basis.

There is positive operating leveraging happening.

They continue to manage the balance sheet hard.

While revenues were better, there is still shrinkage there but expenses are shrinking faster than revenues which produce the positive outcome.

Earnings aside, the fed have settled with citigroup.

Jpmorgan chase was back in november.

The attorney general onto to make one thing perfectly clear.

Citigroup is not the first financial institution to be held accountable by the justice department and certainly will not be the last.

You can be sure he is talking about bank of america.

That included a five billion dollar consumer release according to a person familiar with the discussion.

The justice department latest

This text has been automatically generated. It may not be 100% accurate.

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