Citi to pay $7 billion in Justice settlement

[link to www.usatoday.com]
Citigroup has agreed to pay $7 billion as part of a landmark settlement with the Justice Department for misdeeds associated with the sale of mortgage-backed securities tied to the 2008 financial crisis, Attorney General Eric Holder announced Monday.
The agreement includes a $4 billion penalty, which Holder described as the largest penalty of its kind and "appropriate given the strength of the evidence of the wrongdoing committed by Citi."
"Despite the fact that Citigroup learned of serious and widespread defects among the increasingly risky loans they were scrutinizing, the bank and its employees concealed these defects,'' Holder said in a statement Monday. "The bank's conduct was egregious. And under terms of this settlement, the bank has admitted to its misdeeds in great detail.''
Because of the bank's assertions that its "toxic financial products were sound,'' Holder said Citi was able to pad its own financial position.
"They did so at the expense of millions of ordinary Americans and investors of all types, including other financial institutions, universities and pension funds, cities and towns and even hospitals and charities,'' the attorney general said. "Ultimately, these investors suffered billions of dollars in losses when Citi's false and fraudulent claims came crashing down.''

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