Friday, September 10, 2010

$hitis' Legal Woes Pt. 1

Who knew what about 2007 subprime losses at Citigroup

By Jim Kim Comment

Recall that when the SEC settled with Citigroup (NYSE: C) over charges that the bank misled shareholders, only two executives were charged. Then-CFO Gary Crittenden and former investor relations head Arthur Tildesley agreed to pay $100,000 and $80,000 to settle charges against them individually. Neither Citi nor the former executives admitted or denied wrongdoing.

Judge Ellen Huvelle of the U.S. District Court for the District of Columbia famously rejected that settlement, seeking more information about why other executives were not being held accountable for the same or similar crimes.

Citigroup has filed a brief noting that plenty of other executives had inklings about mounting subprime losses in 2007, reports Bloomberg. The list includes Charles "Chuck" Prince and Robert Rubin.

Others include former Chief Risk Officer David Bushnell, former Chief Operating Officer Robert Druskin, and several current executives including Vice Chairman Lewis Kaden, General Counsel Michael Helfer, and CFO John Gerspach.

The SEC argues that Crittenden and Tildesley were the two most closely associated with the misleading than the others.

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