Citigroup Settles Subprime Mortgage Securities Fraud Claims for $75 Million

For $75 million,Citigroupwill settle federal allegations that it failed to disclose that its subprime mortgage investments were failing while the market was collapsing. This is the first securities fraud case centered on whether investment banks fairly disclosed their own financial woes to shareholders.

Unlike the Goldman Sachs case, which resulted in a $550 settlement and involved allegations that the investment bank misled investors, Citigroup is accused of misleading its shareholders. This also marks the first time the SEC has filed securities fraud charges against very senior bank executives for their alleged roles in subprime mortgage bonds.

美国证券交易委员会（SEC）辩称，花旗集团（Citigroup）直到2007年11月才能揭示其财务状况的真实性质。就那个夏天，投资银行告诉投资者，其价值下降的次级抵押贷款相关资产的约为130亿美元。但是，花旗集团将大约430亿美元的资产敞开了，银行官员认为非常安全。

Key evidence against Citigroup centers on an announcement that it prepared for investors that cautioned that the quarter was likely going to be one of lower earnings in the fall of 2007. However, the investment bank did not reveal its full subprime exposure. Former Citigroup investor relations head Arthur Arthur Tildesley Jr., who has agreed to pay an $80,000 fine over allegations he omitted key information in the shareholder disclosures, is accused of preparing the statement. Former chief financial officer Gary L. Crittenden, who has settled the SEC case against him for $100,000, recorded the audio message to investors.

The government was eventually forced to bail out the investment bank. Citigroup is not admitting to or denying the charges by consenting to settle. Now, however, the investment bank has to defend itself from private shareholder complaints.

Related Web Resources:
SEC Charges Citigroup and Two Executives for Misleading Investors About Exposure to Subprime Mortgage Assets, SEC, July 29, 2010
花旗集团支付7500万美元以解决次级索赔，纽约时报，2010年7月29日
花旗集团同意7500万美元的欺诈罚款, BBC News, July 29, 2010
If you believe that investment fraud may have contributed to your financial losses, contact ourstockbroker fraud law firm.