Thursday, June 18, 2009
"Citigroup Inc. is in the early stages of negotiating with the [SEC] to settle an investigation into whether it misled investors by not properly disclosing the amount of troubled mortgage assets it held as the market began to implode in 2007, people familiar with the matter say. ... At the heart of the crisis have been questions about the value of assets on the books of financial firms, as investors increasingly became distrustful of firms' own estimates and regulators began examining measurement methods and disclosures. ... The SEC also is considering bringing cases against individuals related to disclosure of mortgage assets, including top executives, people close to the situation say. ... Citigroup also disclosed for the first time that it held US subprime-mortgage assets totalling $55 billion--including $43 billion that hadn't been highlighted Oct. 15. ... It isn't clear what civil charges, if any, the SEC would bring against Citigroup or other financial firms, or whether the agency will seek to reach settlements with multiple firms simultaneously", Susan Pulliam and Randall Smith at the WSJ, 28 May 2009.
The SEC wonders "what civil charges, if any, [it] would bring against Citigroup". Forget about this. Make a referral to the SDNY US attorney. The SDNY US Attorney brought criminal charges against Craig Gile at Citigroup's behest over $2 million, my 25 June 2008 post, http://skepticaltexascpa.blogspot.com/2008/06/citigroups-joe-jett.html. And the SEC wonders about bringing civil charges? It's time to close the SEC's enforcement division. Those morons have time to look at two SEC staff lawyers over a few thousand dollars in unreported stock trades and here are billions not properly accounted for.