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Lending / The Ticker

DOJ seeks more than $10B from Citigroup

Lender invested over mortgage-backed bonds

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The U.S. Department of Justice has asked Citigroup (C) for more than $10 billion to settle a probe into the lender’s sale of mortgage-backed bonds in the run up to the 2008 financial crisis, according to an article in Bloomberg.

Prosecutors broke off talks with Citigroup on June 9 and are preparing to sue the bank after the lender offered less than $4 billion to resolve the matter, said the person who asked not to be named because the negotiations are private. The Justice Department could file a lawsuit as early as this week, the person said.

This follows recent reports on the DOj that it is also in legal battles with JPMorgan Chase (JPM) and Bank of Amerca (BAC). 

In November, JPMorgan Chase agreed to pay $13 billion to settle claims of mortgage-backed securities fraud brought against the bank by the U.S. government. Now, the U.S. Department of Justice is using some of that money to speed up its cases against other big banks

On Wednesday, Bank of America got a big dose of good news when a federal judge said that he was considering dismissing a case brought by the U. S. Department of Justice, which alleged that the bank misled investors about the quality of loans bundled into $850 million in mortgage-backed securities.

Source: Bloomberg
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