- This just in July 14
Citigroup will pay approximately $7 billion to settle an investigation of subprime mortgages that fueled 2007's recession, The Associated Press reports.
The agreement was announced Monday after weeks of talks between Citigroup and the U.S. Justice Department. The AP reports that Citigroup "downplayed the risks of subprime mortgages when packaging them selling them to mutual funds, investment trusts, pensions, as well as other banks and investors," causing losses to investors.
"The bank's misconduct was egregious," Attorney General Eric H. Holder, Jr. said in a statement. "Despite the fact that Citigroup learned of serious and widespread defects among the increasingly risky loans they were securitizing, the bank and its employees concealed these defects." Holder added that the settlement does not absolve Citigroup from future charges.
The settlement includes a $4 billion cash penalty to the Justice Department, The New York Times reports. The deal will avert a lawsuit between Citigroup and the U.S. J.P. Morgan is the only other major U.S. bank with a similar settlement thus far, but the Times reports that the agreement "sets the stage" for the Justice Department's negotiations with Bank of America.- -
THE WEEK'S AUDIOPHILE PODCASTS: LISTEN SMARTER
- After Ferguson: Stop deferring to the cops
- Ferguson riots were terrible — but this racist reaction was worse
- 43 TV shows to watch in 2014
- The hilarious hypocrisy of Republicans complaining about the imperial presidency
- Is it now OK to have sex with animals?
- 7 grammar rules you really should pay attention to
- Alien conspiracy theorists think the government is on the verge of spilling big secrets
- How to be the most productive person in your office — and still get home by 5:30 p.m.
- Don't argue about politics this Thanksgiving. Just don't.
- In Ferguson, Michael Brown lost his life — and America's police lost the benefit of the doubt
Subscribe to the Week