THE BURNED OVER DISTRICT

You know what I mean. Some big corporation gets caught red handed screwing large numbers of people for for profit or just because they can. Before the Feds can drag their sorry asses through a public trial they reach a "settlement". The "settlement" says, We dint do nuttin but we will pay a big fine and you will keep the evidence locked up". The latest example is Citi.

Citigroup has agreed to pay $75 million to settle federal claims that it failed to disclose vast holdings of subprime mortgage investments that crippled the bank during the financial crisis, according to two people briefed on the settlement.

In an unusual move, the Securities and Exchange Commission has also singled out two Citigroup executives — Gary L. Crittenden, the former chief financial officer, and Arthur Tildesley, the former head of investor relations — for omitting material information in disclosures to shareholders, according to the two people briefed on the deal.

Mr. Crittenden has agreed to pay a $100,000 fine; Mr. Tildesley will pay $80,000.

The settlement, which was expected to be announced later on Thursday, centers on events in 2007 and 2008, when Citigroup’s reported losses abruptly cascaded, eventually prompting the federal government to rescue the bank. The case is the first to focus on whether banks adequately disclosed the increasingly precarious state of their finances.

As is customary in such settlements, Citigroup will nether admit nor deny the S.E.C. accusations, according to the two people briefed on the matter, who spoke on the condition they not be named because the settlement had not been announced.

It is good to see the Feds collecting some scalps but it would be nice if the fines were a little bigger, by a factor of 10 at least. Then the punishment would fit the crime, which they didn't do.

There is one interesting comparison in the NYT article.

The Citigroup settlement follows the S.E.C.’s $550 million settlement with Goldman Sachs over claims that Goldman misled investors in a complex mortgage investment.

The Citigroup settlement differs from that one, because the S.E.C. is essentially asserting Citigroup misled its own shareholders, whereas it asserted Goldman misled its customers.

Even though they didn't really do it (wink, wink, nudge, nudge) it does raise some questions. If Citi screwed its shareholders, why isn't it trading on the pink sheets by now? And if Goldmine Sachs screwed its customers, why does anyone still do business with them?