Citigroup and U.S. Reach $7 Billion Mortgage Settlement

Citigroup and the Justice Department have agreed to a $7 billion deal that will settle a federal investigation into the mortgage securities the bank sold in the run-up to the financial crisis.

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.

“The bank’s misconduct was egregious,’’ Attorney General Eric H. Holder Jr. said in a statement. “As a result of their assurances that toxic financial products were sound, Citigroup was able to expand its market share and increase profits.”

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Samsung Considers Its Counterattack as Rivals Erode Cellphone Profit

What goes up must come down. That principle seems to be coming true for Samsung Electronics, the world’s top cellphone maker, whose profit is falling in part because of pressure from its price-cutting rivals in China.14Phones-master675