Citigroup’s Crime Spree Against Americans Continues With Slaps on the Wrist

By Pam and Russ Martens and cross-posted from Wall Street on Parade

Yesterday, the Consumer Financial Protection Bureau (CFPB) charged two units of the Wall Street mega bank, Citigroup, with insidious fraudulent acts against homeowners while it imposed a modest $28.8 million in relief and penalties. The penalty portion of $7.4 million is meaningless because this is a bank that serially breaks the law, laughs at its regulators, and, most outrageously, it was simultaneously engaging in heinous misdeeds against Americans while the U.S. government was using taxpayer money to bail out its failed business model of brazen financial frauds. The $7.4 million in fines also stands in contrast to the $14.9 billion that Citigroup reported as net income for 2016.

We will get to the current CFPB charges in a moment, but first some necessary background. On May 20, 2015, Citigroup’s commercial banking unit, Citicorp, pled guilty to criminal charges brought by the U.S. Justice Department for its role in rigging foreign currency markets. The bank was fined $925 million. The conduct for which Citicorp was charged covered the period of December 2007 until at least January 2013. In addition to the fine, Citicorp was put on a three-year probation.

During the period of its criminal conduct, Citigroup and/or its various units were receiving the following from the taxpayer in the largest bailout of a bank in U.S. history: The U.S. Treasury infused $45 billion in capital into Citigroup to prevent its total collapse; the government guaranteed over $300 billion of Citigroup’s assets; the Federal Deposit Insurance Corporation (FDIC) guaranteed $5.75 billion of its senior unsecured debt and $26 billion of its commercial paper and interbank deposits; the Federal Reserve secretly funneled $2.5 trillion in almost zero-interest loans to units of Citigroup between 2007 and 2010. And those are just the details the public has been given thus far.

Simple logic would suggest that when a bank is a serial recidivist lawbreaker, the fines should be going up, not dramatically shrinking; its top management should be ousted and a new Board appointed. None of that is happening. For example, the Justice Department’s 2015 fine of $925 million is 125 times more than the CFPB just charged Citigroup’s two units

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