"This is money that belongs to our members for their long-term retirement security," said Anne Stausboll, Chief Executive Officer for CalPERS. "The settlement was a significant victory for CalPERS and for all investors who relied on statements made by Citigroup. We thank the California Attorney General’s Office and the U.S. Department of Justice for their diligent efforts."
The global settlement required Citigroup to pay $7 billion based on its conduct in packaging, issuing and selling residential mortgage-backed securities prior to 2009. California received a total of $102 million in damages and $90 million in consumer relief.
As part of the settlement, Citigroup acknowledged it made serious misrepresentations to the public, including investors, about the mortgage loans it securitized in residential mortgage-backed securities.
Last month, CalPERS announced it will get back up to $250 million in damages from Bank of America in a federal investigation settlement over its role in the 2008 financial crisis due to its misrepresentation of mortgage-backed securities it sold along with those sold by Merrill Lynch and Countrywide Financial, two companies it acquired in 2008.
CalPERS estimated total recovery on losses sustained from investments in mortgage-backed securities is more than $500 million.
