The Wall Street Journal headline reads "Citi Pays for Subprime Feint." So what happened?
The SEC accused Citi Bank of failing to disclose to investors and potential investors that Citi how Citi had risky mortgage assets. The SEC makes civil fraud charges and extracts a settlement of $75 million.
Wait a minute.
Investors got bad deals because Citi failed to disclose its risky investments. So investors bought presumably overpriced-stock, because Citi's assets were worth less than disclosed.
What happens to the investors now? The SEC burns the investors by taking $75 million of assets from Citi's bottom line, hurting the value of investors' stock even more.
Is this a great government, or what?!
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