Corp-Ethics Home
Log In | Register New User
Home Company Search Related Articles Forum (new!)

Company CitiGroup [Company Info]
  Track this Company (an email will be sent to you everytime a report is filed about this company)

Date Issue Title
11th May 2004 Fraud Investigation Citigroup settles Worldcom claims

Report
Citigroup is to pay $2.6bn to settle claims that it was partly to blame for losses suffered by investors who backed failed telecoms giant Worldcom.
The bank is facing legal action from Worldcom shareholders who lost out two years ago when the firm went bust after admitting it had inflated its profits.

Citigroup lent money to Worldcom, and analysts at its Smith Barney subsidiary had hotly tipped Worldcom shares.

The settlement deal stresses that Citigroup did not break any laws.

Citigroup, the world's biggest bank, added that it planned to increase the amount it has set aside to cover possible future legal penalties and settlements.

The extra litigation reserves, plus the Worldcom settlement, would reduce its after tax profits for the April to June period by $4.9bn, it said.

Moving on

"It is important that we put this unfortunate chapter behind us," Citigroup chief executive Charles Prince said.

News of the payment pushed Citigroup shares 2.3% lower in pre-open trade on Wall Street.

The $2.6bn Worldcom payment will be shared among investors who bought the telecoms firm's shares and bonds between April 1999 and June 2002.

The collapse of Worldcom, hot on the heels of the Enron scandal, shook investor confidence in the finances of corporate America, and triggered a stock market slump.

Worldcom filed for emergency protection from its creditors two years ago and embarked on a lengthy restructuring exercise.

It finally emerged from bankruptcy protection last month under the name MCI.


Other Reports on CitiGroup
Date Issue Company Report
7th Aug 2008 Questionable Practice CitiGroup Citigroup reaches SEC settlement
10th May 2006 Other Issue CitiGroup Citibank overcharged customers in Japan
28th Jun 2005 Other Issue CitiGroup Citigroup fined 14m by UK watchdog
10th Jun 2005 Fraud Investigation CitiGroup Citigroup pays $2bn in Enron case
25th Jan 2005 Fraud Investigation CitiGroup Criminal probe on Citigroup deals
4th Oct 2004 Fraud Investigation CitiGroup South Korea to scrutinise Citigroup
17th Sep 2004 Questionable Practice CitiGroup Japan closes Citigroup branches
19th Jun 2003 Other Issue CitiGroup Citicorp Brokerage Executive Fired

Related Reports from the Banking Industry
Company Issue Report
Abbey Questionable Practice Abbey landed with $1.4 m fine
Deutsche Bank Other Issue Mannesmann payouts retrial begins
UBS Fraud Investigation UBS expects charges over health group
ABN Amro Fraud Investigation Dutch bank fined $80 million by US regulators
Lloyds TSB Questionable Practice Bank 'offered unaffordable loans'
 
Contact Us | Terms of Service | Privacy Policy | Add Report | Links
© 2006 Corp-Ethics.com | Corporate Ethics