Citi Allegedly Helped Mexico Launder Money in New Scandal

Citi allegedly helped Mexico launder money after the Fed dropped an enforcement action after the bank cut ties from the country.

The Federal Reserve revealed on Tuesday that it had terminated a 2013 enforcement action it filed against Citigroup, over “shortcomings in its capacity to police money laundering.”

The enforcement action, which did not carry a fine, was filed against the bank and its Banamex subsidiary over deficiencies in the firms’ anti-money laundering programs, and ordered the firm to strengthen its efforts and update regulators on its progress.

Banamex is the second-largest bank in Mexico.

The Banamex Financial Group was purchased by Citigroup in August 2001 for $12.5 billion USD.

However, Citi announced in late 2023 that it planned to split Banamex from the rest of the bank in the second half of 2024.

Reuters reports that a Citi spokesperson declined to comment on the Fed action.

This has led investors to believe that the Fed bailed Citi in an agreement to cut its ties to Mexico.

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Also Read: Illegal Short Sellers Will Now Face Life Sentence In Prison

Other U.S. Bank News Today

TD Bank now gets caught with illegal market manipulation and has agreed to pay over $20 million under a deal with the SEC.

Investors are calling it ‘pay to play’.

The U.S. broker-dealer unit of Toronto Dominion Bank (TD Securities USA) has agreed to pay more than $20 million to resolve allegations of manipulating the U.S. Treasuries market.

This settlement comes as part of an agreement with U.S. authorities, concluding a lengthy investigation, per Reuters.

In a court filing on Monday, TD Securities admitted to engaging in spoofing practices within the U.S. Treasuries market as part of a deal with the U.S. Justice Department.

The firm also settled related civil charges with the Securities and Exchange Commission (SEC).

Additionally, the bank faced charges for not properly supervising its former head of the U.S. Treasuries trading desk.

From April 2018 to May 2019, a former employee manipulated the U.S. Treasury cash securities market by placing orders he had no intention of executing, a tactic known as “spoofing.”

This practice aims to create a misleading impression of market demand.

U.S. regulators have taken a strong stance against spoofing, which is designed to distort market activity.

However, the criminal bank has now been let go off what investors deem as ‘easily’.

Under the terms of TD’s agreement, the Justice Department will refrain from prosecuting the firm as long as it adheres to the three-year agreement and implements significant compliance improvements.

The DOJ decided not to appoint a third-party monitor for compliance, based on the company’s efforts to address the issues.

As part of the settlement, TD Securities will pay a $12.5 million criminal penalty related to civil investigations by the SEC and the Financial Industry Regulatory Authority (FINRA).

This amount is in addition to an approximately $9.5 million criminal penalty outlined in the agreement.

The bank will also compensate victims with $4.7 million and forfeit $1.4 million.

This settlement comes at a time when the Canadian bank is reportedly on the verge of pleading guilty to separate charges concerning its U.S. retail bank’s alleged failure to prevent money laundering linked to Chinese crime groups and illegal fentanyl sales, as reported by the Wall Street Journal last week.

Also Read: TD Bank Customers Now Say They Cannot Access Their Money

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