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. 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. 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?
Thank you for reading the Bryan Ellis Investing Letter!
Your comments and questions are welcomed below.
About the Author (Author Profile)
Carole VanSickle is the editor-in-chief of the Bryan Ellis Investing Letter.
Category: Real Estate