Citigroup Inc. (NYSE:C) on Wednesday agreed to pay a $285 million fine to settle civil charges brought by the Securities and Exchange Commission that it sold securities backed by mortgages. Citigroup Global Markets (NYSE:C) structured and marketed a $500 million collateralized debt obligation that was backed by subprime loans that it simultaneously bet against. None of which was disclosed to investors.
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Credit Suisse Group (NYSE:CS), the collateral manager, was fined $2.5 million because it allowed Citi (NYSE:C) to influence the portfolio and also was responsible for disclosure. Samir H. Bhatt, the portfolio manager mostly responsible, agreed to a six-month suspension as an investment adviser and a $50,000 fine. The fine is the agency’s third largest since the financial crisis. Goldman Sachs Group Inc. (NYSE:GS) paid $500 million to settle charges relating from a similar case, and $300 million was paid by State Street Corp. (NYSE:STT) over allegations that it misled investors over a money-market fund.
“The SEC said it’s charged 81 companies and individuals and forced firms to pay fines or hand back $1.97 billion over actions related to the financial crisis. But the lack of criminal prosecutions of principal figures during the crisis is a key reason for the ongoing Occupy Wall Street protests, which have swelled in popularity,” according to MarketWatch.