The Justice Departments $7 billion fine may signal another battle lost for Citi CEO Michael Corbat.
Wall Street thinks Citigroup got a raw deal.
On Monday, the giant bank agreed to pay $7 billion to settle government claims that Citigroup sold mortgage bonds that its bankers knew were rotten in the years leading up to the financial crisis. Shares of Citi C 1.45% are up today. But they are still down nearly 7% this year. By comparison, Bank of America BAC 1.28% stock is up slightly. And shares of Wells Fargo WFC 0.07% are up nearly 15%.
Bank analyst Mike Mayo of CLSA seemed shocked and disappointed that Citi had agreed to settle for so much during a call with Citi’s top management on Monday morning. “Why did you settle for what many people think is a huge amount?” he asked Citi CEO Michael Corbat on a conference call with other analysts. “It’s much more than I or anyone I talk to on Wall Street thought it would be.”
Corbat answered that he thought the settlement was fair… (Fortune)