Citigroup is to pay out $590m to shareholders in one of the biggest settlements connected to the global financial crisis, after it was accused of hiding its subprime exposure during the 2008 crash.
The US banking giant denied it had hidden the extent to which it was exposed to the toxic mortgages but said it wanted to avoid further legal costs, according to the BBC.
Shareholders united to contend they were fraudulently misled by statements released by the company in 2008, a time when shares suffered huge losses.
They said the bank failed to make writedowns on complex financial instruments at an early stage and deliberately tried to hide the scale of the risk.
The $590m settlement, equivalent to £370m, adds to the $27.7bn already lost by Citigroup in 2008 when shares fell to a 10th of their previous value.
Similar cases have been brought against other US banks with the Bank of America agreeing to a $601.5m settlement in 2010 and Wells Fargo paying out $590m last year.
£1bn business since inception
Considered doing so in 2015
Client communication considerations
Aviva: ‘We are sorry’
FOI from Professional Adviser