Citi’s $75M SEC settlement payout rejected

Citigroup failed yesterday to win a judge’s approval to pay $75 million to settle with the Securities and Exchange Commission over claims the bank misled investors by understating subprime-related mortgage investments, Bloomberg news reported. Citigroup made misstatements on earnings calls and in financial filings about assets tied to subprime loans as the housing crisis unfolded in 2007, the SEC said in a July 29 complaint filed in federal court, with some disclosures omitting more than $40 billion in investments. Since Judge Ellen Huvelle wasn’t satisfied with Citigroup’s written proposal and wanted more information, attorneys are to submit a new round of court filings starting Sept. 8, said Matthew Miller, an attorney for a Citigroup shareholder. SEC spokesperson Kevin Callahan said the agency “will provide the court with additional information requested.” [Bloomberg]

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