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Citigroup Reaches $7 Billion Subprime Mortgage Settlement

Jaclyn Jaeger | July 15, 2014

Citigroup announced today that it has agreed to pay $7 billion to the Department of Justice, several state attorneys general, and the Federal Deposit Insurance Corporation in a landmark settlement to resolve a federal investigation into the sale of subprime mortgages. The misrepresentation of those securities was a contributing factor to the financial crisis.

"Citi acknowledges that, over the course of numerous transactions, the bank put together billions of dollars of mortgage-bond deals with loans it knew were defective, and then misrepresented the quality of those mortgage-bond deals to investors who purchased them," Associate Attorney General Tony West said in a prepared statement.

In a separate statement, Citigroup's Chief Executive Officer Michael Corbat said the settlement, reached over...

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