Citigroup says prosecutors probing Mexico unit
By Christina Rexrode
Bloomberg
Citigroup Inc. on Friday said U.S. federal prosecutors, Mexico’s banking regulator and the Securities and Exchange Commission are looking into its Mexico subsidiary, Banamex.
Mexico’s National Banking and Securities Commission has started an “extraordinary review” into the matter, the bank said in a regulatory filing, and the SEC has started a formal investigation. The bank also said the Justice Department has requested information, a development The Wall Street Journal has previously reported.
The investigation stems from Citigroup’s C -1.28% announcement in February that it had lost as much as $400 million due to a possible fraud involving Banamex and a Mexican oil-services company, Oceanografia, which is a supplier to the Mexican state-owned oil company, Pemex.
The development has raised broader questions about Citigroup’s ability to manage risk across its sprawling operations.
The Journal also has reported that the FBI is reviewing the matter for possible criminal violations, a contention that Friday’s filing didn’t mention. The filing also didn’t mention the Banamex USA unit, based in California. The Journal has reported that Banamex USA is being investigated for allegedly failing to report suspicious banking transactions along the U.S.-Mexico border.
Write to Christina Rexrode at christina.rexrode@wsj.com
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