SEC Says Prince, Rubin Knew of Losses on Assets at Suit's Focus

[kpete]

Source: Bloomberg

SEC Says Prince, Rubin Knew of Losses on Assets at Suit's Focus

Charles O. “Chuck” Prince and Robert Rubin were among Citigroup Inc. officials who knew 2007 losses were mounting on mortgage assets that U.S. regulators have faulted the bank for not disclosing, a court filing shows.

Prince, the bank’s chief executive officer at the time, and Rubin, who was then chairman, knew the highest-rated segments of subprime mortgage-backed securities were the source of about $200 million in new losses in October 2007, the Securities and Exchange Commission said yesterday in a filing at federal court in Washington. In July, the agency accused the bank and two other executives of failing to disclose $40 billion in subprime assets before losses surged. It didn’t target Prince and Rubin.

U.S. District Judge Ellen Huvelle asked the agency last month to explain what senior executives knew as she considers approving Citigroup’s $75 million settlement with the regulator. The agency’s identification of Prince and Rubin may trigger questions from the judge about why the agency didn’t bring claims against more people, said Peter Henning, a professor at Wayne State University Law School in Detroit.

“How aware were they is always an open question in these kinds of cases,” said Henning, a former SEC lawyer. “The SEC should have provided investors a little more assurance that senior management will be held accountable in these cases.”

Read more: http://www.bloomberg.com/news/2010-09-09/prince-rubin-knew-assets-at-focus-of-sec-claim-fueled-losses-agency-says.html

[gratuitous]

1. Job was answered by God out of the whirlwind

We aren't allowed to hold Masters of the Universe like Chuck and Bob accountable for so much evil in the world. Where were all you peons when Masters like Prince and Rubin were laying their churn and burn schemes? Can you loop a reed through the leviathan's nose and ride it? Can you order the markets to go this far and no further? Have you set the boundaries of the Masters' responsibilities while lifting the limits on their compensation? Who are we to question their judgments?

[Wilms]

2. Good 'ol Robert Rubin.

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