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Citigroup reported to be facing $10 billion fine over mortgage misdeeds


Citigroup reported to be facing $10 billion fine over mortgage misdeeds

The US Justice Department reportedly wants $10 billion from Citigroup to settle an investigation into the bank’s sale of mortgage-backed bonds.

The 2008 financial crisis was triggered by toxic loans bundled into such mortgage securities and sold to investors without the risk being properly revealed.

Citing a source close to the investigation, Bloomberg has reported that the US government broke off settlement talks on June 9 after Citigroup offered less than $4 billion dollars to resolve this. Without an agreement it would pursue the matter through the courts.

A spokesman for Citigroup declined to comment.

JPMorgan Chase has already paid $13 billion to settle similar claims.

The Justice Department is also investigating a number of other banks.

They include Bank of America, Royal Bank of Scotland, Credit Suisse, and Goldman Sachs Group, people familiar with the investigations have told Reuters.

The increased activity is a sign that President Barack Obama is trying to follow through on his 2012 pledge to hold more banks accountable for their role in the housing crisis, after prosecutors faced criticism for a lack of high-profile action.

with Reuters


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