NEW YORK (Reuters) - The office New York Attorney General Andrew Cuomo said on Friday it planned to bring legal action against Citigroup Inc, accusing the bank of fraudulently selling auction-rate securities and destroying documents that had been subpoenaed by the state.
In a letter of intent obtained by Reuters, the state said its five-month probe into auction-rate markets revealed the bank falsely assured customers that these securities were as liquid as cash. The securities have been difficult to sell since credit markets tightened earlier this year.
The state wants Citigroup to buy back these securities at par value.
A Citigroup spokeswoman declined comment.
Unregulated finance ftw!
fraud is fraud, has nothing to do with regulation or the lack thereof
“Things that could be prevented by appropriate regulation have nothing to do with regulation.” —
We could never afford all the regulation that you want.
…..well, that certainly assumes a lot.
It’s illegal to lie to customers about your product. Falsely representing the liquidity or potential value of a financial instrument is illegal.
The fact that Citi violated the law is what allows the state of New York to file charges.
Explain to me again how regulation will fix a problem stemming from… ignoring regulations.
Hmmmm …. if a meat company were breaking the law, and selling tainted beef … man, I wonder if any sort of regulations are around to help catch that.
Since we have both regulations against financial misconduct, and regulations demanding investigation and enforcement of the laws against financial misconduct, you have no point.
If a beef company willfully sells tainted meat and ignores any potential FDA inspections/punishments, what third layer are you recommending be instituted to prevent their behavior?
In the same vein, if Citi fraudulently sold securities while ignoring any potential state/SEC investigations, what third layer of regulations are you recommending to prevent their behavior?
In both meat packing and securities dealing we have regulations against fraud and mandating enforcement of those laws, yet firms still commit illegal activities.
Again, please explain how yet another set of regulations on top of the set(s) already violated or ignored will help.
Who said anything about a “third layer”? The current regulation and enforcement of said regulation has traditionally accorded far too much deferrence to banks. Valuation and enforcement being revamped could make the regulations more appropriate.
You seem to be confusing regulation with common law.
Worse, you seem to think more regulations prevent people from breaking the law.
This is kind of like arguing with a person who thinks gun-free zones prevent shootings.
… or it could be that you’re an idiot.
laws certainly are effective against lawbreakers..
stop fucking posting links to wikipedia and actually explain your argument.
Currently there are laws/regulations requiring a bank to explain the situation, details, etc…. to their customers.
citigroup allegedly said “fuck you law” and did it anyways.
What are you proposing that would somehow stop a bank from telling the govt/laws to fuck off ? More laws ? yeah, that seems to work just fine
Flawless riposte.
How about addressing the point that regulations on businesses don’t prevent actual crimes and are not needed to punish them.
Flawless riposte.
How about addressing the point that regulations on businesses don’t prevent actual crimes and are not needed to punish them.
… read what’s already been posted, maybe?
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