Citigroup DOJ Settlement Could Be Template for Future Deals

Department of Justice's $7 Billion deal could set precedent for negotiations with other U.S. banks.
5:10 | 07/14/14

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Transcript for Citigroup DOJ Settlement Could Be Template for Future Deals
Okay. It's Monday July for. Its -- are open for another week in today's big number seven. Billion dollars that the fine. Slap on city and its -- In the mortgage crisis ever again -- in New York show here with the details Jeff -- for joining us on Monday morning it we sorted out Jeff did you have a nice weekend. I did it was little slice of heaven how -- you it was absolutely perfect Monday of course coming around and we are bright eyed bushy -- especially when you're looking at seven billion dollars what's going on behind -- -- this. Right seven billion it's nice work didn't get it I'm speaking of course being a Justice Department lawyer. They shut down city for seven billion and fines and penalties and whatever they want to label it for egregious violations from 2003 to 2008. Leading up to the financial crisis -- -- we know they were egregious because all the stuff they sold went bankrupt. Which is true for just about everybody back -- there and we continue to got to do they're scapegoating process. Seven -- -- the -- and that is supposedly that's the big headline at least on the front pages. About four billion of -- goes to the Justice Department themselves. Which is nice work didn't get it considering their entire budget for 2013. But regulating financial loss was 700 million so they got about five Bagger just there and one Citibank settlement nice job guys. A we'll see if that actually -- out corporate malfeasance on Wall Street. -- well OK well we'll have to wait and see if there's going to be getting out of a correction if you will coming from that. But back -- matters an -- a lot of -- -- -- -- in the back from all of that. But here's element ask you about the back in April Citibank actually offers -- case for less than 400 million dollars. From 400 million to seven billion that's an awfully big disparity. Yellow the government started at twelve billion so I think the first on -- negotiation and any good negotiation the start of confidence just on the other side of kind of idiotic. -- -- cities that our lawmakers however there room for Ryan and governments that might come back -- to sharpen -- pencils. This really comes down to whether or not said he was willing to go to court a lot of these cases are settled on the idea. That nobody wants to really be locked in a trial with the government to inhabit all laid out in terms of how bad. All these violations were and what they knew about their mortgage securities when. The truth -- -- that having lived through this myself everyone knew they were a little bit dirty and and no one really thought that these asset backed securities were worth everything that was being. Sad about them but at the same time that's what the market was doing and so you can make this city look pretty bad they don't want -- gravitational risk and they wanted to put this behind them seven billion. Apparently was just about the bleeding point in terms of negotiation that's of the government felt like they could finally get. To -- at least this tiny chunk of everything that went on from again 20032000. This was a long time ago this is a very long time ago justice delayed may not be denied but it certainly is past due. Well and obviously comes at a very anti Christ -- spot -- executives of some of the employees they also hooked up mechanics will be facing criminal charges from this gives theory. They -- -- you know it adds and we still haven't had any criminals go and so that becomes a question down. Whether or not -- that's ever gonna happen in the answer is almost certainly know. -- that that -- official that any specific employees will go we still haven't had anyone go to jail except for fabulous fab. From Goldman Sachs it was just a very minor player no one's gone to jail for the financial crisis no one's really been held accountable. The bank at south Citi shares are up today because they -- they kind of put this behind them as a same but that doesn't mean anything -- settlements don't settle anything. So really they then made the question is who's being punished here -- the answer is it's very hard to find anyone -- -- case Citibank's one being held responsible for this but they're not the only bank note right I mean back. BankAmerica is on the -- as well everyone's watching this deal because they're worried that it's gonna set the president for the next deal and BankAmerica has apparently -- next deal now. -- debt is surprising only in the sense that we've seen settlements before from BankAmerica or -- -- over a hundred billion dollars in fees penalties and fines and even paid. In the wake of the 2008 crisis I'm not sure where the money is gone exactly. I -- the -- should be full at the Department of Justice -- again they only have a 700 million dollar budget. Four -- operations for financial fraud. And in fact as an entire vehicle and tire and see they've only got about 28 billion dollar budget so I don't know where all these fines going or not that much of it goes back to the wronged parties. Or the the consumer groups that would claim that they need this but I know that justice themselves taken about a 60% concept 57%. Cut. From of this settlement straight into the coffers of the DOJ which again has nice work. A lot of shaking their heads this Monday morning -- seven billion dollars certainly going to be one way to -- -- the week Jeff MacKey from Yahoo! finance bags are always great seeing you. And we have the podium a live shot of the US attorney general Eric Holder is -- -- -- announcement in just a short time from now hold a news conference -- -- and Easter -- in the -- bank settlement. You can see that live right here on slash live for W -- the big -- -- -- --

This transcript has been automatically generated and may not be 100% accurate.

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