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Citigroup close to $7 billion settlement over pre-financial crisis investments

Citigroup close to $7 billion settlement over pre-financial crisis investments
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There has been another huge settlement between a major bank and the US Justice Department.

Citigroup is reportedly close to paying about $7 billion (five billion euros) to resolve accusations it defrauded investors who bought mortgage-backed securities as part of the housing bubble that led to the financial crisis.

Media reports quoted sources close to the matter as saying full details could be announced as early as next week

Most of the settlement cash would go to the US government, but Citigroup would also have to provide several billion dollars worth of help to struggling mortgage holders.

A settlement of around $7 billion for Citigroup would be higher than analysts had expected based on the bank’s mortgage securities business.

Some Wall Street analysts had previously estimated that Citigroup likely had about $3 billion (2.2 billion euros) of reserves set aside for a related settlement. US authorities had reportedly demanded more than $10 billion (7.35 billion euros) last month.

JPMorgan Chase paid $13 billion (9.55 billion euros) in November to resolve a range of probes, in a deal that US authorities said would serve as a template for others.

Bank of America has also been in negotiations to resolve similar investigations.

with Reuter