Citigroup will be forced to pay a total of $7 billion in fines and consumer relief following a full investigation by the U.S. Justice Department into mortgage-backed securities sold prior to the financial crisis, U.S. Attorney General Eric Holder announced Monday.
Citigroup reported a 96 percent drop in second-quarter sales following the announcement of the settlement. This result was better than anticipated considering the amount of the fines.
The $7 billion total includes a historic civil penalty of $4 billion, the largest of its kind to date. This is double the penalty that was given to JPMorganChase in a similar settlement.
Citigroup’s total fines also include $2.5 billion in relief that will be given to homeowners and communities affected by the bank’s illegal activities.
Attorney General Holder made a point to say that this settlement did not “in any way absolve Citigroup or its individual employees from facing any possible criminal charges in the future.” Rather, this resolution was merely the latest step on behalf of the U.S. Justice Department to hold those financial institutions that “defrauded the American people” accountable.
The full statement as prepared for delivery can be read here.
Story compiled with information from AFP, Reuters, and the U.S. Department of Justice.