Citigroup Inc reaches $7 billion mortgage-bond settlement

WASHINGTON/NEW YORK/BROOKLYN: 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. Phil Mattingly reports on “Bloomberg Surveillance.”

Citigroup Inc 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.

The bank took a $3.7 billion charge in the second quarter ended June 30 to cover the cost of the settlement, the New York-based firm said today in a statement. Citigroup climbed 3.6 per cent to $48.71 at 8:33 AM in early trading in New York.

Citigroup was among lenders including Bank of America Corp investigated by the Justice Department for allegedly misrepresenting the quality of mortgage-backed bonds sold to investors before 2008’s credit crisis.

JPMorgan Chase & Co, the biggest US bank, agreed in November to pay $13 billion to resolve similar federal and state probes.