Citibank settled the Justice Department’s mortgage market investigation yesterday, agreeing to pay $4 billion in civil penalties, $500 million in penalties to various states and $2.5 billion in “soft dollars” to aid consumers damaged by their pre-financial crisis shenanigans. To reach agreement, the bank was also absolved of any liability for credit default obligations, derivatives that fueled the crisis. Attorney General Holder offered up a verbal slap to the face, writing, “the bank’s conduct was egregious.”
So why did Citigroup share prices close 3.1% higher on the market?