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Citi discovers fraud in Mexican unit; cuts Q4 earnings

  • Citigroup (C) will adjust downward its Q4 results by $235M as a result of a fraud discovered in its Mexican operations. Full year net income will now be $13.7B.
  • The shennanigans surrounds loans made to a Mexican oil services company (a key supplier to Pemex) through an accounts receivable financing program.
  • "While Citi's review of these matters is ongoing, Citi believes the fraud is isolated to this particular client."
  • Press release
  • Shares -0.8% premarket
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Comments (4)
  • ilikemoney
    , contributor
    Comments (17) | Send Message
     
    Those shennanigans are an isolated incident I'm sure.
    28 Feb 2014, 09:10 AM Reply Like
  • Surfer Steve
    , contributor
    Comments (18) | Send Message
     
    I'm shocked, shocked to hear about fraud in Mexico!

     

    Call it the cost of doing business down there.
    28 Feb 2014, 09:12 AM Reply Like
  • jstratt
    , contributor
    Comments (3214) | Send Message
     
    For interested investors I will offer a perspective on C.

     

    C has always had huge international lending operations and ends up getting in trouble at least once a decade. The share prices on multiple occasions have dropped by 90% or more ie $100 to $8 or $50+ down to .95c.

     

    This little Mexico event is small potatoes as an event but it is symbolic of huge shareholder losses over an investing lifetime. One should recognize the business model risk of C in a time of international troubles and take care to ensure a potential reward is adequate vs the risk taken.
    28 Feb 2014, 12:05 PM Reply Like
  • brazil2010
    , contributor
    Comments (45) | Send Message
     
    Can someone tell me what's not fraudulent in Mexico ?
    28 Feb 2014, 02:52 PM Reply Like
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