Report: Prosecutors Seek $10 Billion To Settle Citigroup Charges
Federal Prosecutors are seeking more than $10 billion from Citigroup (NYSE: C) to settle an investigation into the bank's sale of mortgage-backed securities related to the 2008 financial crisis, according to a report by Bloomberg.
The Justice Department could file a lawsuit as early as this week, according to the news service.
The report comes after JPMorgan Chase agreed to pay $13 billion to settlement an apparently similar issue with the U.S. Justice Department in November.
Prosecutors also said at the time that some of the money would be used to step up the pursuit of other lenders. About $4 billion is earmarked for the Federal Housing Finance Agency to resolve claims.
In 2011, Citigroup agreed to pay $285 million to settle related charges brought by the Securities and Exchange Commission. A judge rejected the settlement, which was reinstated last week by the U.S. Court of Appeals for the Second Circuit.
A lawyer for Citigroup at the time favored the settlement, reportedly because admitting legal blame "could open the floodgates to shareholder lawsuits.”
Citigroup traded recently at $47.31 a share, down 1.7 percent.
© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.