DOJ Asks Citigroup (C) for More than $10B to Settle Mortgage Probes: Report

By Jun 13, 2014, 1:33 PM Author's Blog  

DOJ Asks Citigroup (C) for More than $10B to Settle Mortgage Probes: Report

According to a Friday Bloomberg report that references sources familiar with the situation, the U.S. Justice Department [DOJ] is seeking more than $10 billion from Citigroup Inc. (C) to settle investigations involving faulty mortgage-backed securities sold in the run-up to the financial crisis.

Prosecutors broke off negotiations talks with Citigroup on June 9 after the New York-based banking giant offered less than $4 billion to settle the charges, notes the report, adding that the U.S. Justice Department is preparing to file a civil lawsuit as early as this week.

Citi is among at least 8 banking institutions under investigation by the DOJ and state AGs over the quality of home mortgages backing bonds sold to investors before and during the 2008 financial crisis.

JPMorgan Chase (JPM) agreed to pay $13 billion to settle charges over similar issues last November, and Bank of America (BAC) is reportedly in talks to pay as much as $17 billion to settle a similar case brought by the DOJ.

Citi shares closed down $1.02, or 2.11 percent, at $47.27 on the New York Stock Exchange on Friday.

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