Citi Faces $270 Million Loss; “In Panic” Over Chinese Port Commodity Fraud

Isn’t that the same thing they did with MBS rather than properly assign them to the trusts? Ahhh homeowners your loans have been paid…over and over and over again!

Justice League

Zerohedge:

Suspected metals fraud in China sparked claims of betrayal by both U.S. bank Citigroup and trade house Mercuria over who would absorb about $270 million in exposure to financing deals, a London court heard this week.

The dispute:

Mercuria held copper and aluminium in Chinese warehouses and agreed a series of deals that were effective loans from Citi using the metal as collateral.

Under the repurchasing agreements, or repos, Citi agreed to purchase metal from Mercuria before selling it back at a slightly higher price to include interest on the effective loans.

The two groups were in the midst of several repo deals when the potential fraud in China was uncovered in warehouses in both Qingdao and Penglai. Citi demanded early repayment of the repos and Mercuria refused.

As Bloomberg reports,

Citigroup was in a “state of panic” when alleged fraud was uncovered in two Chinese ports…

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