Law360, New York (October 22, 2014, 9:23 PM ET) -- Citigroup Global Markets Inc. has reached a settlement agreement with the FDIC in a Ninth Circuit appeal alleging a number of banks spurred on Colonial Bank's failure by selling it poor-quality mortgage-backed securities, and the bank insurer said Wednesday it expects Bank of America Corp. to exit the suit shortly as well. The banks, along with Credit Suisse, Deutsche Bank, Barclays and others, had been accused of selling poor-quality securities as rock solid to Colonial Bank before its failure. The appeal of a district ruling that the claims were time-barred has been stayed pending a ruling in another very similar suit, regarding Strategic Capital Bank, and that suit in turn is stayed pending the Supreme Court's ruling in Gelboim v. Credit Suisse Group AG. Yet it appears Citigroup has chosen to settle without waiting for the outcomes of those suits.
“Federal Deposit Insurance Corporation as receiver for Colonial Bank and appellee Citigroup Global Markets Inc. hereby move this court for an order dismissing Citigroup Global Markets Inc. from the ... appeal,” the parties said in yesterday's brief document.
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