Citigroup to pay $7bn to settle risky sub-prime mortgages case

PanARMENIAN.Net - Banking giant Citigroup will pay $7bn to U.S. authorities to settle an investigation into risky sub-prime mortgages, BBC News reports.

Citigroup will pay $4bn to the Department of Justice and $2.5bn for "consumer relief", the latter including investment in affordable homes and mortgage relief.

The settlement stems from the sale of securities made up of sub-prime mortgages, which were at the center of the 2008 financial crisis.

Citigroup is the second major bank to pay a settlement since an investigation into the loans.

JPMorgan Chase paid $13bn last year to settle government investigations.

The Citigroup fines are said to have surprised stock analysts and people inside the bank, who had hoped to settle for less.

According to the U.S. Attorney General, Eric Holder, "under the terms of this settlement, the bank has admitted to its misdeeds in great detail". He said the settlement "does not absolve Citigroup or its employees from facing any possible criminal charges in the future".