August 7, 2008
AG Cuomo Gets Citigroup to Settle for $7 Billion
Attorney General Andrew Cuomo announced that Citigroup will buy back $7 billion worth of auction-rate securities from almost 40,000 customers. The auction rate market collapsed in February, and investors were left unable to sell them. Cuomo said, "Today’s settlement sends a resounding message to the entire auction rate securities industry: this type of deceptive behavior will not be tolerated." Citibank must buy back the securities by November 5 of this year; the company will also pay a $100 million fine for misleading investors.
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damn!
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It'll be entertaining to see how Citigroup buries these $7.1 billion in potential losses. Another writedown is inevitable, along with more liquidity hunting: "Hello Dubai".
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Wow, the financial industry is fucked. Good for Cuomo letting the industry know, loud & clear, that they can't get away with selling and misrepresenting garbage investments.
Cuomo really has a hard on for the Governor's mansion.