Citigroup Inc. will buy back more than $7 billion in auction-rate securities and pay $100 million in fines as part of settlements with federal and state regulators, who said the bank marketed the investments as safe despite liquidity risks.

Citigroup will buy back the securities from tens of thousands of investors nationwide under separate accords announced Thursday with the Securities and Exchange Commission, New York Attorney General Andrew Cuomo and other state regulators. The buybacks must be completed by November.

Fire up those tin cups, boyz.

UBS, Morgan Stanley and Merrill Lynch also had similar suits and in some cases already settlements.


kindandgentlejd at 15:21 2008-08-07 said:
Let the litigation begin! There is not enough money out there for the investor and regulator litigation that will be associated with MBS tied to Payment Option ARMs. This just the tip of this iceberg... you have the lenders getting hit on the front end by consumers... then getting hit on the back end by investors... you squeeze too hard and before you know it, no one is left to squeeze. Permalink
Alexius12 at 16:35 2008-08-07 said:
I have been warning since 9/2007 that Citi is a dead man walking! It will get worse for them with their HELOC exposure and other stuff to come.

Nice to be validated...

...It is public news that Citicorp is having severe financial problems, cutting down jobs, and had to resort to selling out to Abu Dhabi, the largest emirate in the United Arab Emirates, a large portion of the company at double the interest Citigroup offers bond investors (11% return). Its investors are angry because of non transparency on its reporting CDOs, and is the subject of several ongoing state agency investigations. Then reading the many negative news lately of Citicorp did not help. I believe that shrewd and savvy investors, with inside knowledge, know that Citigroup is a dead man walking, just like Countrywide Bank, Indymac Bank and the likes... The loss forecasts for various banks due to the housing crash are coming in over $500 B these days. Losses on all subprime mortgage assets will be over $400 billion worldwide, excluding the effect of CDOs and credit-default swaps linked to the loans. Permalink

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