Citigroup Inc., the third-largest U.S. bank by assets, agreed to pay $7 billion in fines and consumer relief to resolve government claims that it misled investors about the quality of mortgage-backed bonds sold before the 2008 financial crisis, Bloomberg News reported today. The bank, which is scheduled to report results today before U.S. markets open, took a $3.8 billion pretax charge in the second quarter ended June 30 to cover the cost of the settlement, the New York-based firm said. The accord covers securities issued, structured and underwritten between 2003 and 2008, according to Citigroup. The settlement includes a $4 billion civil penalty, the largest of its kind, according to the Justice Department. It also includes $500 million to state attorneys general and the Federal Deposit Insurance Corp. The rest will be divided among various forms of consumer relief to be provided by the end of 2018, according to Citigroup’s statement.
