This is the second settlement for Citigroup/Smith Barney, the other with Worldcom. What this article leaves out is that Citigroup has $6.7 billion in litigation reserves which will fully cover the settlement.
Is it me or is it wierd that a company has nearly $7 billion in litigation reserves? Did Citigroup make that much money in the 90’s that it can so easily pay such huge settlements? I am not against profit, don’t get me wrong, but Citigroup had a hand in some of the biggest scams of the century (Worldcom and Enron) and they are just going on like business as usual. Did they really learn a lesson? Did they even lose money after all the fines and settlements were paid? I am not a corporation basher, but I worked for the large wall street firms for several years and the one thing that came out of that work was that they do not have your best interest at heart.
How long will it be until Citigroup has a hand in another multi-billion dollar fiasco? I guess I don’t really have a point here, just pointing out some recent developments and putting out a warning.