JUST LETTING YOU KNOW
Citigroup is settling a lawsuit for $590 million. More than a billion dollars. This is over claims that Citigroup deceived investors by hiding the extent of its dealings in subprime debt. It is a pact with the investors.
Citigroup CEO Vikram Pandit says they are settling to put the pain from the financial crisis behind them. Citigroup denied the allegation saying that the settlement is solely to eliminate the uncertainty, burden and expense of further protracted litigation and that existing legal reserves will cover the cost of the settlement.
Why am I bringing this up? Because no one is going to jail. No one is even indicted. Nobody is even going to be tried. Now why do I also bring this up? Because little old me back in 2007 read to you on my radio show that Citigroup was taking bad loans off their books before earnings and putting them back on the books after earnings. I could have been sued for that. You know why I wasn’t sued? Because I was right!
So somebody at Citigroup took bad loans off their books before earnings and put them back on after earnings to hide massive losses. That is the definition of felony. Fraud. Massive, over the top manipulation and not one person is being investigated, indicted, found guilty…nothing.
Instead – Citigroup denies the allegation and pays the $590 million because they’re just nice people.
My question: Why are the prosecutors settling? Why are they letting felonies and felons off the hook? How many times are we going to see crimes, front and center in plain sight!
Lloyd Blanfein, the Goldman Sachs CEO perjured himself in front of congress. And nothing…no investigation. He’s off. Nothing.
And do they wonder why everybody is running to the hills from the markets? How do we trust, when the head honcho top dog big cheeses that got away with felonies – nothing happens to them? They’re still making $20…30…50 million a year. They’re still riding in limousines and living in big houses and committing felonies.
But they put Martha Stewart in jail. And by the way she was guilty and she should have gone to jail.
But I’m using that as an example of what’s going on. And when you know that people from the Obama administration are now working at Citigroup and Goldman Sachs…and people from Citigroup are now working in the Obama administration – and the same thing happened in the Bush administration – therein lies the problem.
Man, this whole thing irritates me. It sickens me.
They’ll put the little guy away…the guy who can’t fight and doesn’t have the millions of dollars to fight. But they refuse to go after some of these bigwigs. And when the market is trading a thousand shares a day and all these companies are out of business, they wonder why everybody ran away from the markets.
I don’t know what to tell each and every one of you – like I do – a level playing field. Reward success and penalize crime. Reward integrity. Penalize felony.
Now here’s the good news and the epilogue to this. Citigroup is now doing the right thing. They’ve gotten back down to basics and hopefully they don’t ever repeat this again. And frankly, there’s nothing we can do about this. We’re nobodys. We’re a bunch of muppets.
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Gary Kaltbaum owns Kaltbaum Capital Management, LLC (“KCM”), an investment adviser registered with the U.S. Securities and Exchange Commission. The opinions expressed herein are those of Mr. Kaltbaum and may not reflect those of KCM. The information offered in this publication is general information that does not take into account the individual circumstances, financial situation or individual needs of an investor. The information herein has been obtained from sources believed to be reliable, but we cannot assure its accuracy or completeness. Neither the information nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Any reference to past performance is not to be implied or construed as a guarantee of future results.