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Citigroup to post $2.7 billion in added legal costs in fourth-quarter: CEO

Reuters – Citigroup Inc will record $2.7 billion in additional legal costs and another $800 million of repositioning charges in the fourth quarter, Chief Executive Officer Mike Corbat said on Tuesday.

Corbat, speaking at an investor conference in New York, said the legal costs stemmed from investigations into foreign exchange trading, setting of LIBOR interest rates and compliance with rules against money laundering.

The repositioning charges related to shrinking its operations by moving out of buildings and reducing payrolls.

The added expenses will leave the company “marginally profitable” in the fourth quarter, he said.

A Citi sign is seen at the Citigroup stall on the floor of the New York Stock Exchange

Corbat’ announcement was the second time in six weeks the company has suddenly disclosed an increase in legal expenses. On Oct. 30, it lowered its previously announced third-quarter results because of an additional $600 million in legal costs. The change took Citigroup’s third-quarter profit down to $2.84 billion.

Corbat said on Tuesday the company believed the latest expenses will go a long way toward covering current legal liabilities.

Citigroup shares dropped as Corbat announced the latest costs. The stock was down 2.6 percent to $54.90 at mid-morning in New York.

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