Citigroup to settle for $730 million

AFP-JIJI

U.S. banking giant Citigroup said Monday it will pay $730 million to settle a class-action suit by bondholders related to the 2008 financial crisis.

The suit alleged Citigroup misled buyers of its bonds over its exposure to subprime mortgages and other high-risk securities ahead of and during the crisis, from May 2006 to November 2008.

The plaintiffs had argued that Citigroup misrepresented its exposure to mortgage-related assets, according to Bernstein Litowitz Berger & Grossman, the plaintiffs’ attorneys.

Citi also understated the loss reserves for its mortgage loans and “falsely stated” that assets held off its balance sheet were of high value, Bernstein Litowitz said.