Citigroup to pay $730M in settlement

Posted at 2:54 PM, Mar 19, 2013
and last updated 2013-03-19 14:54:58-04


(LOS ANGELES TIMES) — Citigroup‘s $730-million legal settlement likely won’t be the bank’s last whopping payout as private and government attorneys force Wall Street to do penance for the financial crisis.

At the end of 2012, Citi estimated it could face approximately $5 billion in future legal expenses, up from about $4 billion a year ago.

The massive settlement, which a federal judge in Manhattan must still approve, likely won’t be  the last huge sum Citi shells out, but much of the worst may be behind the New York-based bank, according to Erik Oja, a banking analyst at S&P Capital IQ.

“These things will continue for a while, but we’re much more than halfway through,” Oja said. The bank has the resources and time to settle and litigate as needed, he added.

The $730-million settlement, which surfaced in documents filed in federal court Monday, stems from a class-action suit filed by investors who bought Citi’s bonds and preferred stock before the financial crisis of 2008-2009.