Citigroup to pay USD 75 Million in its Subprime Case

Citigroup will pay USD 75 Million to settle claims alleged by the Securities and Exchange Commission for deceiving its investors in relation to the subprime mortgage industry. The financial institution made incorrect declarations about its overall exposure to subprime mortgages. The former CFO of Citigroup has accepted allegations and will personally pay USD 100,000for his role in deceiving investors.

Citigroup pronounced having superior risk-management even in late 2007 when the mortgage market was in a downturn. The Financial Crisis Inquiry Commission questioned Citigroup executives including the Chief Executive Officer about the matter. The institution had disclosed exposure of USD 13 Billion publicly in October 2007 however board members were aware of an additional USD 43 Billion in exposure.