Citigroup and the Justice Department are reportedly at an impasse over the terms of a potential multibillion settlement the two parties have been discussing to resolve claims the lender mislead investors.
Prosecutors broke off talks with the lender earlier this month and are preparing to sue the bank, Bloomberg News reported citing a person familiar with the matter, adding a Justice Department lawsuit could be filed as early as next week. Citigroup (C) is reportedly offering less than $4 billion to resolve the probe, roughly $6 billion less than what the Justice Department is asking, Bloomberg reported.
The Justice Department is investigating a handful of banks for misleading investors about the quality of bonds backed by mortgages as housing prices plummeted.
A Citi representative declined to comment on the Justice Department probe.
The news comes after reports earlier this week that talks between the Justice Department and another bank–Bank of America–have stalled, also due to a dispute centered on how much the bank should pay to settle mortgage-related litigation. Bank of America (BAC) in late March had said it has had preliminary discussions about a potential resolution of civil litigation brought by the Justice Department and other government authorities regarding the company’s residential mortgage-backed securities and other mortgage-related matters.
