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Citigroup agrees to pay $730m to settle class-action lawsuit

The second-biggest financial-crisis-related payout.

The US financial services firm Citigroup has agreed to pay $730m to settle a class-action lawsuit filed by investors four years ago.

The amount to be paid will be covered by existing litigation reserves.

Plaintiffs in the class-action suit include the Arkansas Teacher Retirement Systems and the Louisiana Sheriffs’ Pension and Relief Fund. The suit alleges that Citigroup misled investors in its bonds and preferred stock over its exposure to sub-prime mortgages between 2006 and 2008.

Citigroup said that it “denies the allegations and is entering into this settlement solely to eliminate the uncertainties, burden and expense of further protracted litigation”.

In 2012, Citigroup paid $590m to settle a lawsuit filed by shareholders accusing the bank of failing to disclose fully its exposure to toxic mortgage products in the run-up to the financial crisis.

In 2010, the firm also agreed to pay $75m to the US Securities and Exchange Commission (SEC) to settle civil charges that it had failed to disclose to investors more than $40bn of sub-prime exposure.

The bank, in a statement, said: “Citi is a fundamentally different company today than at the beginning of the financial crisis. We have overhauled risk management and reduced risk exposures, while shedding assets and businesses that are not core to our strategy.”

In 2012, the Bank of America (BofA) paid $2.4bn to shareholders to settle a lawsuit, which remains the biggest crisis-related class-action settlement. The suit alleged that BofA had concealed information about the financial health of Merrill Lynch.

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Geoffrey Howe dies, aged 88

Howe was Margaret Thatcher's longest serving Cabinet minister – and the man credited with precipitating her downfall.

The former Conservative chancellor Lord Howe, a key figure in the Thatcher government, has died of a suspected heart attack, his family has said. He was 88.

Geoffrey Howe was the longest-serving member of Margaret Thatcher's Cabinet, playing a key role in both her government and her downfall. Born in Port Talbot in 1926, he began his career as a lawyer, and was first elected to parliament in 1964, but lost his seat just 18 months later.

Returning as MP for Reigate in the Conservative election victory of 1970, he served in the government of Edward Heath, first as Solicitor General for England & Wales, then as a Minister of State for Trade. When Margaret Thatcher became opposition leader in 1975, she named Howe as her shadow chancellor.

He retained this brief when the party returned to government in 1979. In the controversial budget of 1981, he outlined a radical monetarist programme, abandoning then-mainstream economic thinking by attempting to rapidly tackle the deficit at a time of recession and unemployment. Following the 1983 election, he was appointed as foreign secretary, in which post he negotiated the return of Hong Kong to China.

In 1989, Thatcher demoted Howe to the position of leader of the house and deputy prime minister. And on 1 November 1990, following disagreements over Britain's relationship with Europe, he resigned from the Cabinet altogether. 

Twelve days later, in a powerful speech explaining his resignation, he attacked the prime minister's attitude to Brussels, and called on his former colleagues to "consider their own response to the tragic conflict of loyalties with which I have myself wrestled for perhaps too long".

Labour Chancellor Denis Healey once described an attack from Howe as "like being savaged by a dead sheep" - but his resignation speech is widely credited for triggering the process that led to Thatcher's downfall. Nine days later, her premiership was over.

Howe retired from the Commons in 1992, and was made a life peer as Baron Howe of Aberavon. He later said that his resignation speech "was not intended as a challenge, it was intended as a way of summarising the importance of Europe". 

Nonetheless, he added: "I am sure that, without [Thatcher's] resignation, we would not have won the 1992 election... If there had been a Labour government from 1992 onwards, New Labour would never have been born."

Jonn Elledge is the editor of the New Statesman's sister site CityMetric. He is on Twitter, far too much, as @JonnElledge.