Citigroup faced SEC questions over its value on brokerage

NEW YORK Sat Feb 23, 2013 12:16am IST

A Citi sign is seen at the Citigroup stall on the floor of the New York Stock Exchange, October 16, 2012. REUTERS/Brendan McDermid/Files

A Citi sign is seen at the Citigroup stall on the floor of the New York Stock Exchange, October 16, 2012.

Credit: Reuters/Brendan McDermid/Files

Related Topics

Stocks

   

NEW YORK (Reuters) - At the same time that Citigroup Inc (C.N) was unsuccessfully trying to convince an arbitrator that the brokerage it owned with Morgan Stanley (MS.N) was worth as much as $23 billion, the U.S. Securities and Exchange Commission in August was asking Citigroup to document the valuation it had placed on the asset.

The request was made public on Friday when the agency posted written responses from Citigroup to questions from SEC staff about the bank's financial disclosures.

The SEC request was made in an August 22 letter, six days before the two companies announced they were extending the deadline to set the price that Morgan Stanley would pay for an additional 14 percent of the brokerage, of which Morgan Stanley already owned 51 percent.

At the time, the companies asked an arbitrator to set the price because they could not agree on the brokerage's worth.

Citigroup's valuation proved to be more than one-and-half times too high when the deal terms were finally stuck on September 11, and the company announced a $4.7 billion charge to earnings to write down the value on its balance sheet of its 49 percent stake.

After announcing the charge, Citigroup told the SEC it was submitting the requested valuation information in a separate letter, which was not released on Friday.

A Citigroup spokesman declined to comment on the correspondence with the SEC.

(Reporting by David Henry in New York; Editing by Leslie Adler)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared
Sensex surges nearly 400 points on energy reform, state elections

Sensex surges nearly 300 points on energy reforms, state elections

The BSE Sensex surges nearly 300 points and the Nifty gains 90 points after the government's energy reforms lead to a rally in energy firms, while wins by Prime Minister Narendra Modi's party in two state elections raise expectations for additional reforms.  Full Article 

REUTERS SHOWCASE

Indian State Media

Indian State Media

Controlling the message: Modi chooses state media  Full Article 

Asian Markets

Asian Markets

Japanese stocks lead sharp Asia rebound as U.S. data reassures   Full Article 

Gold Curbs

Gold Curbs

Finance Ministry wants to reimpose curbs on gold imports - ET  Full Article 

Eyeing Reebok

Eyeing Reebok

Investor group aims to buy Reebok unit - WSJ  Full Article 

Gold Lower

Gold Lower

Gold eases as dollar, equities recover on strong U.S. data  Full Article 

Health Check

Health Check

Credibility meets compromise in Europe's bank stress test.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage