The Corporate World - Written by Jere Beasley on Wednesday, September 17, 2008 10:02 - 1 Comment
Citigroup may have to pay billions in buybacks
It has been reported that Citigroup Inc. has been negotiating with state and federal regulators in an effort to resolve allegations of wrongdoing in the auction-rate-securities market. This could result in Citigroup buying back several billion dollars of the illiquid securities from investors and paying a sizable fine. In early August, New York Attorney General Andrew Cuomo threatened to sue Citigroup for alleged fraud in the marketing and sales of auction-rate securities. The Attorney General’s office says the firm wrongly told customers the securities were safe, liquid and cash-equivalent. Additionally, Citigroup failed to tell investors that, from August 2007 until earlier this year, the market was kept afloat primarily because the bank placed bids in auctions for the securities.
Citigroup is said to have been in talks with representatives from the Attorney General’s office, other state securities regulators and the Securities and Exchange Commission. If Citigroup reaches an agreement with regulators, which may or may not happen, the firm could be forced to spend more than $5 billion to buy out individuals, charities and other investors whose cash is tied up in the frozen auction-rate-securities market. Reportedly, the agreement also could include a fine of as much as $100 million. In describing how the scheme works, the Wall Street Journal wrote:
Investors currently hold more than $200 billion in auction-rate securities that can’t easily be sold. Auction-rate securities, typically issued by municipalities, student-loan companies and charities, are long-term securities with short-term features. The interest rates reset at weekly or monthly auctions run by Wall Street firms. The market, which once topped $330 billion, began to struggle last year as the credit crisis spread. Wall Street firms worked for several months to support the market. Then in February, they stopped supporting the auctions and the market froze, leaving investors with largely illiquid securities.
The more we learn about how many in Corporate America have operated, the worse it seems. Citigroup is just one of the “Bad Guys” and unfortunately there are many more.
Source: Wall Street Journal
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Cuomo is in no position to investigate others as he secretly harasses my girlfrined Denise, all because she will not chase him and compete for his personal attention. They met when he was running for office and when she found out he is a liar about his personal life she left. He then warned her he would ruin her future and career in NY. She still has all the paper work and voice mails to prove the following true. I want her to come forward and shine the light on this corrupt official for the public to see. First he destroyed her credit card identity theft case being investigated by Officer Paul Arroyo of Precinct 28. He also stopped attorney Alfonso DeCicco from advising her when she was dealing with a shady broker regarding her apt rental. Without his advise Denise lost her home and spent a fortune to recover. Both men were told to no longer have anything to do with her because the AG’s office was handling everything. They buried it all. He also pressured her HMO doctor so much that Dr Eliabeth Uchitelle decided to close her office. Denise is a tall blond and an attractive NYC yoga teacher who helps many and travel to orphanages to help kids. Cuomo secretly stepped outside the law for personal satisfaction and he’s breakijng the public’s trust. Let’s investigate Andrew Cuomo and take a good look at what he does to woman behind closed doors. This is unlawful and, I’ve read on other blogs, misogynistic.