Citigroup Inc (NYSE:C) Is Asked To Pay $30M Fine

Posted by George Brook October 4, 2013 0 Comment 1146 views

Citigroup Inc (NYSE:C) has launched an aggressive Lehman Brothers Holdings Inc. The protest is against the supposedly unprecedented bid to cut its right to millions of dollars in interest-payments that are tied to Citigroup Inc (NYSE:C)’s $3B bankruptcy-claim against the investment bank that failed.

The cash reserve

On Wednesday, Citigroup Inc (NYSE:C) lawyers literally blasted the “scorched-earth” tactics that Lehman was resorting to, even as it attempts to request a bankruptcy-judge to provisionally permit what remains of the failed bank to use the $2B of cash in a Citigroup Inc (NYSE:C) account. It wants to use this amount to meet the bank’s claims against the failed investment-bank.

Lehman wants James Peck the United States Bankruptcy Judge to put an end to what it has termed as the interest rate arbitrage Citigroup Inc (NYSE:C). This is with reference to the rival claims that amount to assets worth billions of dollars. If Lehman provisionally pays-off the bank, it would be able to stop the interest-payments that are currently being channelized to Citigroup Inc (NYSE:C). The actual court hearing may take place only in 2015. Till that point of time, Lehman would have to pay the bank millions of dollars.

A large part of Citigroup Inc (NYSE:C) claims are connected to terminating the derivatives-trades between them at the point of time Lehman filed for bankruptcy in 2008. Citigroup Inc (NYSE:C) said that it had the right to interest payments even under bankruptcy and that it is not interested in accepting the $2B provisional payment that Lehman wants to give it. The reason for this being that in the event Layman wins in the legal battle, they would then be able to grab it back from the bank.

In major development Citigroup Inc (NYSE:C) was found guilty of leaking Apple Inc. (NASDAQ:AAPL) research to funds and it has been asked to pay a fine of $30m.

Thursday’s trading session

In Thursday’s trading, Citigroup Inc (NYSE:C) dropped by 0.64%. The shares opened at a price of $48.81, climbed to an intraday high of $48.98 and dipped to a close of $48.40.

About George Brook

George Brook covers money and politics for GDP Insider. George is a veteran journalist who has also covered Congress, national political conventions and presidential politics. George also covers the White House as well as economic and domestic policy for GDP insider. George's reporting has won numerous awards, including two Scripps Howard awards, two National Headliners, two Gerald Loeb Awards, as well as honors from Sigma Delta Chi and the National Press Club.

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