The Financial Times and Reuters are both reporting that Citigroup is preparing to pay $US7 billion to settle a U.S. Department of Justice investigation into whether it defrauded investors in its mortgage backed securities.
Citigroup stock fell 1.17% yesterday following a similar report in the Wall Street Journal.
The FT says Citi will pay $US4 billion in cash to the DOJ and set aside $US3 billion in relief for mortgage holders. The deal is expected to be made public next week. Citi reports earnings on Monday.
Reuters said analysts had expected, on average, that Citi would have to pay $US3.4 billion to settle the case. The FT said analysts were expecting a $US1.5 billion payout. Either way, the deal coming down the pike is more than twice what anyone realistically expected Citi would have to pay.
JPMorgan paid $US13 billion to settle a similar case.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.