But no jail time…
For years, Citigroup employees feared that millions of dollars the bank was moving to Mexico might be suspicious. Yet in many cases, the bank did not alert regulators or step up its monitoring for money laundering, federal prosecutors said Monday.
Even as the Citigroup unit Banamex USA was growing to dominate remittances from the United States to Mexico, the bank did not properly safeguard its systems from being infiltrated by drug money and other illicit funds, prosecutors said.
On Monday, Citigroup agreed to pay $97.4 million in a settlement after a long federal investigation into Banamex USA. In exchange, the Justice Department will not file criminal charges against the bank in connection with inadequate oversight of Banamex USA, which is based in California.
As part of the agreement, Banamex USA “admitted to criminal violations by willfully failing to maintain an effective anti-money-laundering” compliance program, the Justice Department said.
Wall Street’s bet against empty malls is getting too crowded, according to Citigroup Inc. analysts, who instead recommend wagering against individual retailers as the “next big short.”
Investors should consider buying default protection through the derivatives market on a basket of bonds from retailers that include Target Corp., Gap Inc., Nordstrom Inc. and Macy’s Inc., according to Citi’s Anindya Basu and Calvin Vinitwatanakhun.
The strategy differs from the one pursued by a growing number of hedge funds, which have wagered against mall properties through CMBX derivatives indexes that tracks commercial mortgage-backed securities. The prevailing theory is that failing brick-and-mortar retailers will mean higher vacancies and bankruptcies for mall operators, with losses inflicted on CMBS holders.
Law360, New York (February 21, 2017, 10:34 PM EST) — A New York federal judge on Tuesday trimmed a putative class action brought by investors who say they lost money in derivatives transactions because big banks conspired to manipulate Euribor, the euro interbank offered rate. But two plaintiffs, including a California retirement fund, still have claims against JPMorgan and Citigroup.
U.S. District Judge Kevin Castel cut four plaintiffs from the suit, saying they lacked standing, as well as six foreign defendants who didn’t fall under his jurisdiction because their allegedly illegal activities weren’t tied to the U.S. He also dismissed all Racketeer Influenced and Corrupt Organizations Act and Commodity Exchange Act claims from the suit and cut three out of four Sherman Act claims in the case.
Citigroup Inc. C, -1.75% said late Friday that federal officials have launched a probe into the bank’s foreign hiring practices, according to a Securities and Exchange Commission filing. “Government and regulatory agencies in the U.S., including the SEC, are conducting investigations or making inquiries concerning compliance with the Foreign Corrupt Practices Act and other laws with respect to the hiring of candidates referred by or related to foreign government officials,” Citigroup said in the filing.
Citigroup Inc (C.N) said on Monday it would speed up the transformation of its U.S. mortgage business by exiting servicing operations by the end of 2018.
Citi said it would sell its mortgage servicing rights on about 780,000 Fannie Mae and Freddie Mac loans of non-Citibank retail customers to New Residential Mortgage LLC (NRZ).
The remaining Citi-owned loans and other mortgage servicing rights not sold to NRZ are expected to be transferred to loan servicing provider Cenlar FSB [CENLR.UL] in 2018.
The lender said it expected these deals to hurt first-quarter pretax results by about $400 million, including a loss on sale and certain related transaction costs.
The move is intended to simplify CitiMortgage’s operations, reduce expenses and improve returns on capital as the company focuses on mortgage originations.
Citigroup Inc (>> Citigroup Inc) mortgage units have been fined $28.8 million for keeping home borrowers in the dark about options to avoid foreclosure and making it difficult for them to apply for relief, the U.S. consumer finance watchdog said on Monday.
CitiMortgage will pay an estimated $17 million to compensate wronged consumers, as well as a civil penalty of $3 million, the Consumer Financial Protection Bureau said. CitiFinancial Services will refund approximately $4.4 million to consumers, and pay a civil penalty of $4.4 million.