Citigroup Inc. said it agreed to pay $7 billion to settle a U.S. government investigation into mortgage-backed securities the bank sold in the run-up to the 2008 financial crisis. Citigroup said on Monday it would pay a total of $4.5 billion in cash and provide $2.5 billion in consumer relief. The settlement figure was more than twice what many analysts expected earlier this year but less than the $12 billion the government had sought in negotiations with the bank. Citigroup is the second bank to settle so far with the government for an investigation into whether banks downplayed the risks of subprime mortgages that had been wrapped into other mortgage-backed securities and sold to investors. JPMorgan Chase has also settled and Bank of America is reportedly in talks to do so, too.
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-- Reuters and The Associated Press contributed to this report.
First published July 14 2014, 4:42 AM