California Attorney General Kamala D. Harris says the Golden State will collect around $200 million of the roughly $7 billion that Citigroup announced today it would pay to settle federal claims regarding the sale of defective mortgage investments during the subprime housing boom.
Citigroup, the nation's third-largest bank, said this morning it would pay $4.5 billion in fines and $2.5 billion in consumer relief. The settlement stems from the sale of securities made up of subprime mortgages,
Harris, in a statement released in Los Angeles, said California will receive $102.7 million in damages, which will serve to reimburse the state's pension funds for losses on investments in the mortgage-backed securities of Citigroup and its affiliates. The state is also guaranteed at least $90 million in consumer relief, she said.
"Citigroup misled consumers and profited by providing California's pension funds with incomplete information about mortgage investments," Harris said. "This settlement holds Citi accountable and compensates the state's pension funds that protect the retirement savings of hardworking Californians."
--City News Service