Citibank Forced to Restate Third Quarter Results With $600 Million Legal Charge

Citibank has restated its third quarter results to incorporate a $600 million legal charge due to a criminal probe into the bank's foreign exchange business. This "legal charge" means that the bank anticipates it will eventually have to fork over $600 million in legal fees to defend itself against these criminal charges. $600 million!

And continuing a pattern we've seen since the 2007-2008 financial crisis, the charges apparently will be leveled against the bank itself, not against any individuals. Personal responsibility and accountability are a thing of the past.

Of course, individuals were involved in the alleged illegal activities, and the bank has responded thusly:

More than 25 traders, including Citigroup’s Rohan Ramchandani, have been fired, suspended or put on leave since allegations of currency-benchmark manipulation emerged last year.

So will any individuals face charges this go-round? Well, at $600 million, it seems even mighty gargantuan Citibank may not be able (or even want to) protect the individuals involved, as prosecutors may - at some point in the future, we note - actually identify some individuals for prosecution. (On that one, we'll have to wait and see, since they're not actually being charges at the moment:

U.S. prosecutors are pressing to bring charges against a bank for currency-rate manipulation by the end of the year, and actions against individuals probably will follow in 2015, people familiar with the probe said earlier this month. 
 

Meanwhile, the economy registered a 3.5% rise in GDP, the financial media reports that U.S. banks continue to shore up their balance sheets, the Fed has ended QE based on their view that the economy and the financial system continue to improve. Really? On the other hand, one take-away that's for sure here is that law firms - at least the ones that represent the Citibanks of the world - are "in the money." (If you clicked on the link, yes, that certainly is Ginger Rogers kicking things off.)

Question for all you out there who continue to use reason and common sense to understand the world around us: Does a bank that needs to reserve $600 million for legal fees for but one of a number of fines and/or criminal charges strike you as "healthy"?

Which may be a perfect segue into this:

Happy Halloween!