Citigroup is nearing a deal with the U.S. Government to pay $7 billion to settle charges that the bank sold troubled mortgage securities to customers ahead of the financial crisis, a report says.
According to The Wall Street Journal, which cites unnamed sources, Citigroup is close to resolving a probe by the Justice Department less than a month after the government threatened to sue the bank if it did not increase its offer to pay roughly $4 billion to settle the charges. At the time, the DOJ was seeking a $10 billion payment from Citigroup to end the investigation into the bank’s packaging of mortgages into securities.
The two sides, which have been been far apart for weeks, are now finalizing the details of an agreement that would avert a federal lawsuit, and a settlement could be announced as early as next week, the Journal said.
The government reached a $13 billion settlement with JP Morgan Chase last fall over that bank’s own sale of toxic mortgage-backed securities and Bank of America is in ongoing talks with the DOJ to resolve similar probes.
The Justice Department also recently reached a $9 billion settlement with BNP Paribas over the French bank’s violations of U.S. Trade sanctions.