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Citigroup Agrees To $425M Fine For Benchmark Manipulation

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Citigroup Agrees To $425M Fine For Benchmark Manipulation

Citigroup Inc (NYSE: C) shareholders can now close the book on yet another legacy issue from the bank’s past, but closure comes at a steep price.

Accusations, Settlements And Fines

Citi and its affiliates have agreed to pay $425 million in fines related to Libor and other benchmark manipulation during the Financial Crisis.

Last May, Citi and JPMorgan Chase & Co. (NYSE: JPM) were two of five banks to pay a total of more than $5 billion in settlements related to accusations of foreign currency trade-rate manipulation.

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Despite the cost, Citi shareholders cheered the settlement, which eliminates an element of uncertainty from the stock.

“These settlements represent a significant step for Citi in resolving its legacy benchmark rate investigations,” spokesperson Danielle Romero-Apsilos said in a statement.

Romero-Apsilos went on to note that the company has made “substantial investments in its systems, controls and monitoring processes to better guard against inappropriate behavior.”

Stock Movements, Expectations

Citi’s stock is up 2.1 percent in Wednesday’s session following the news.

Citi shareholders can also rest assured that the settlement will have no impact on the company’s future earnings. The company said the cost of the settlement is already accounted for in its legal reserves.

Citi’s stock remains down more than 90 percent from its pre-crisis highs.

Disclosure: The author holds no position in the stocks mentioned.

Posted-In: Danielle Romero-Apsilos financial crisis LIBORNews Forex Legal Markets Best of Benzinga

 

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