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

COAL BLOCK ALLOCATIONS

REUTERS SHOWCASE

Banned From Bidding

Banned From Bidding

India bans Finmeccanica from bidding for contracts amid graft case.  Full Article 

Sugar Talk

Sugar Talk

Sugar export rebound at risk from rising domestic prices.  Full Article 

GDP Preview

GDP Preview

Economy likely grew faster in June quarter: Reuters poll.  Full Article 

New Ordeal

New Ordeal

After disasters, stricken Malaysia Airlines staff brace for job cuts.  Full Article 

Deal Talk

Deal Talk

Kleiner to invest in messaging startup Snapchat at near-$10 bln valuation - report.  Full Article 

Expert Zone

Expert Zone

Column - Why inflation is so persistent.  Full Article 

Reuters India Mobile

Reuters India Mobile

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