http://www.propublica.org/article/did-citi-get-a-sweet-deal-banks-says-sec-settlement-on-one-cdo-clears-it-onhttps://twitter.com/#!/Jake_Bernstein/status/129632499373576192@Jake_Bernstein
Judge Rakoff nails it w/this q: How can a securities fraud of this nature and magnitude be the result simpl… (cont) deck.ly/~ket22
Did Citi Get a Sweet Deal? Bank Claims SEC Settlement on One CDO Clears It on All Othersby Jesse Eisinger and Jake Bernstein
ProPublica, Oct. 20, 2011, 3:21 p.m.
In the run-up to the global financial collapse, Citigroup’s bankers worked feverishly to create complex securities. In just one year, 2007, Citi marketed more than $20 billion worth of deals backed by home mortgages to investors around the world, most of which failed spectacularly. Subsequent lawsuits and investigations turned up evidence that the bank knew that some of the products were low quality and, in some instances, had even bet they would fail.
The bank says it has settled all of its potential liability to a key regulator – the Securities and Exchange Commission -- with a $285 million payment that covers a single transaction, Class V Funding III. ProPublica first raised questions about the deal in August 2010. In announcing a case, the SEC said it had identified one low-level employee, Brian Stoker, as responsible for the bank’s misconduct.
It made no mention of the dozens of similar collateralized debt obligations, or CDOs, Citi sold to investors before the crash.
A bank spokesman said the SEC would not be examining any of those deals. “This means that the SEC has completed its CDO investigation(s) of Citi,’’ the spokesman asserted in an e mail.
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