Does the $75 Million SEC Settlement Require Auditors?
The Securities & Exchange Commission (SEC) had filed a lawsuit against Citigroup Inc, claiming that the company had made many misstatements on their earnings calls and in various financial filings related to assets held in conjunction with subprime loans.
In it’s initial complaint on July 29, the SEC said that Citigroup Inc failed to disclose to its investors the more than $40 billion it held in subprime mortgages in 2007.
U.S. District Judge Ellen Huvelle questioned whether Citigroup Inc’s $75 million settlement with the SEC was enough of a penalty and deterrent, opining that more SEC oversight was needed.
U.S. District Judge Huvelle in Washington is hearing arguments October 4, 2010 from attorneys on both sides, the SEC and Citigroup, Inc.
Citigroup Inc. attorneys have been pressing Judge Huvelle for approval. They claim that internal policies have been instituted to assure that violations of that kind could not happen again.
Huvelle suggested that the attorneys include language in the agreement binding Citigroup Inc. to the practices, this might include an independent auditor who would have oversight of regulatory filings.