This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Citigroup Faces Federal Probe After Discovering $400 Million Fraud in Mexican Unit

NEW YORK (TheStreet) -- Federal authorities are investigating Citigroup after the bank disclosed it discovered $400 million in fraudulent loans at its Mexican unit, Banamex, according to the New York Times.

VIDEO TRANSCRIPT:

The U.S. government has opened an investigation into Citigroup's (C) Mexican unit over $400 million in fraudulent loans, according to a report by the New York Times.

Citigroup disclosed in February that it discovered the fraudulent loans in its Mexican subsidiary, Banamex, that were made to Mexican oil services company Oceanografia.  Citigroup said that at least one Banamex employee processed falsified documents in order to give the company a loan it cannot repay.

U.S. federal authorities now are investigating Citigroup's internal controls and whether the bank ignored warning signs of the fraud.  The investigation is being overseen by the FBI and prosecutors from the U.S. attorney's office in Manhattan, and Citi also faces a civil probe by the Securities and Exchange Commission.

The investigations come soon after the Federal Reserve rejected Citi's capital plan as part of its stress tests.

At last check, shares of Citi were falling more than 1.6% to $47.45.

In New York, I'm Brittany Umar for TheStreet.

-- Written by Brittany Umar in New York.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AAPL $127.60 0.00%
FB $83.09 0.00%
GOOG $535.38 0.00%
TSLA $205.27 0.00%
YHOO $44.66 0.00%

Markets

DOW 18,034.93 +208.63 1.17%
S&P 500 2,100.40 +19.22 0.92%
NASDAQ 4,994.6020 +62.7870 1.27%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs