Citigroup Agrees To Pay $285 Million To SEC For Deceptive Trading

October 22 00:00 2011

New York, Oct 22, 2011 (RainbowNewsLine.com) – Citigroup has agreed to pay a humungous sum of $285 million to the SEC. Interestingly Citi has neither agreed to nor disagreed to the charges raised against them. Citigroup spokesperson says that the bank wants to put the matter behind them and focus on the upcoming events. However, the fact that Citi is paying so dearly to let bygones be bygones is in itself a confession. The SEC has stated that the amount will be used to compensate investors who were at a loss because of Citi’s unethical and near fraudulent conduct.

Citi group was involved in a transaction of the size of $1 billion. The transaction was for Credit Suisse Asset management unit. However, Citi executives influenced purchase of assets over $500 million, therefore about 50% of the portfolio in question. They, then started using derivatives to bet against these assets. Then they sold the assets to a group of unsuspecting investors not telling them that Citi was heavily shorting the assets.

This put Citi in an unethical position where it would profit from the misery of its clients. To avert reputation losses and big fat payments resulting from lawsuits, Citi has agreed for out of court settlement.

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