Citigroup, Justice Department reach $7B deal

Citigroup, Justice Department reach $7B deal

NYT: The $7 billion deal will settle a federal investigation into the mortgage securities the bank sold.

The settlement, announced on Monday morning, includes a $4 billion cash penalty to the Justice Department – the largest payment of its kind – as well as $2.5 billion in so-called soft dollars earmarked for aiding struggling consumers and $500 million to state attorneys general and the Federal Deposit Insurance Corporation.

The deal, after months of contentious negotiations, averts a lawsuit that would have proved costly for both sides and resolves a civil investigation into Citigroup’s packaging and selling of mortgage securities that soured during the financial crisis, causing large losses to investors.

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