Business news

Citigroup to pay $75 million in settlement

WASHINGTON --- Banking titan Citigroup Inc. is paying $75 million to settle civil charges that it misled investors about its potential losses from subprime mortgages as the housing bust hit in 2007.

The Securities and Exchange Commission announced the settlement with Citigroup on Thursday. It said the company repeatedly made misleading statements in calls with analysts and regulatory filings about the extent of its holdings tied to high-risk mortgages.

The bank had said the exposure was $13 billion or less. The SEC said it exceeded $50 billion.

Citigroup earned $2.7 billion in the second quarter of this year. So, the penalty represents less than 3 percent of its net income from April through June.

The settlement marked the second time in weeks that the agency reached an agreement on punitive action against a major Wall Street firm. Earlier this month, Goldman Sachs & Co. agreed to pay $550 million to settle civil fraud charges that it sold mortgage investments without telling buyers that the securities were crafted with input from a client betting on them to fail.

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