Citigroup Faces Huge Fines for Inaccurate Mortgage Information
According to the Financial Industry Regulatory Authority (FINRA), Citigroup Global Markets, Inc., an issuer of residential mortgage-backed securities (RMBS), posted inaccurate data for RMBS deals “that it should have known was inaccurate” and then did not correct the problem even when it came to light within the company. “Citigroup did not correct the problem until years later,” said executive vice president and chief of enforcement for FINRA Brad Bennett, adding that “in this case, for over six years, investors potentially used faulty data to assess the value of the RMBS.” FINRA has fined Citigroup $3.5 million and points out that Citigroup did not pull down the faulty mortgage performance data on its website until May of this year[1]. FINRA also accused Citigroup of failing to maintain books and records of certain re-priced mortgage-backed securities following a margin call. The firm neither admitted nor denied the charges. The bank will pay an additional $2.2 billion as part of the 49-state foreclosure fraud settlement reached between state attorneys general and major U.S. lenders in February 2012[2]. A Citigroup spokeswoman said yesterday simply that “We are pleased to put this matter behind us.”
Do you think that $3.5 million in damages is enough?
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[1] http://www.dsnews.com/articles/finra-fines-citigroup-for-inaccurate-mortgage-information-2012-05-22
[2] http://www.businessweek.com/news/2012-05-22/citigroup-to-pay-3-dot-5-million-over-faulty-subprime-data
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Carole VanSickle is the editor-in-chief of the Bryan Ellis Investing Letter.
Comments (3)
Category: Real Estate
No its diffinately not enough! Now if only the other banks especially WELLS FARGO will pay back homeowners for not giving them a fair chance at refinancing or modifying their loan. Many homeowners have lost lots of equity in their home due do the unwillingness of Wells Fargo and others not helping. Some of these individuals still have equity and can not so Short Sales. So, they have to be given some kind of relief and that in my opinion should be a principle reduction by 50% or more along with the current low interest rates. Freddie Mac has recenlty showed rates at 2.5%. This would diffinately put homeowners in a position they can handle and be able to stay in their homes. The banks need to stop playing russian rulet with consumers and just do the right thing by re-structuring terms on the loans.
What a con game.. steal billions, pay back millions.. with the congress and administration on the take, in one way or another.. life in the fast lane among the thieves couldn’t be better.
This will never change until billionare thives are treated just like any other common thief.. who goes to jail and does not get to keep what he stole.
No rule of law for now.. just suvival of the 1% at all costs.
They should be charges $ 3.4 million per for every day they failed to make corrections.