More hush money
Citigroup Said to Pay $75 Million to Settle SEC Subprime Case
The company made misstatements on earnings calls and in financial filings in 2007 about assets tied to subprime loans, the Securities and Exchange Commission said in a federal lawsuit yesterday in Washington.
“Even in late 2007, as the mortgage market was rapidly deteriorating, Citigroup boasted of superior risk-management skills in reducing its subprime exposure,” SEC Enforcement Director Robert Khuzami said in a statement. “The rules of financial disclosure are simple. If you choose to speak, speak in full and not half truths.”
Citigroup Inc. will pay $75 million to settle U.S. regulatory claims that it misled investors by failing to disclose billions of dollars in holdings tied to subprime mortgages while the housing crisis unfolded.
Citigroup’s former chief financial officer and head of investor relations agreed to pay a total of $180,000 for failing to disclose the risk.
Former CFO Gary Crittenden, who left Citigroup last year, agreed to pay $100,000 to settle claims he didn’t disclose the risk after getting internal briefings.
Arthur Tildesley, Citigroup’s former head of investor relations, will pay $80,000 to settle claims that he helped draft disclosures that misled investors, the SEC said. Tildesley now heads cross-marketing at Citigroup, according to the agency.
Citigroup, Crittenden and Tildesley agreed to settle the case without admitting or denying the SEC’s allegations.
“Mr. Crittenden is pleased to have resolved this matter,” said John Carroll, an attorney for Crittenden at law firm Skadden, Arps, Slate, Meagher & Flom LLP in New York.
Citigroup is pleased to “put this matter concerning certain 2007 disclosures behind us,” the company said.
All these companies were doing their version of Gods work, making money, rolling along, without anything but lip service to the "rules of financial disclosure", as was put above.
And now they take a slap on the wrist and walk away saying, "SEC and Investors, get thee behind me!"
Tracy Alloway provides quite an exposing run down on the kinds of non-disclosing disclosures Citigroup made in 2007 in FT Alphaville: Citi’s super senior subprime SEC slip