XML 52 R32.htm IDEA: XBRL DOCUMENT v3.22.2.2
CONTINGENCIES
9 Months Ended
Sep. 30, 2022
Commitments and Contingencies Disclosure [Abstract]  
CONTINGENCIES CONTINGENCIES
The following information supplements and amends, as applicable, the disclosure in Note 23 to the Consolidated Financial Statements of Citigroup’s Second Quarter of 2022 Form 10-Q and First Quarter of 2022 Form 10-Q and in Note 27 to the Consolidated Financial Statements in Citi’s 2021 Form 10-K. For purposes of this Note, Citigroup, its affiliates and subsidiaries and current and former officers, directors, and employees, are sometimes collectively referred to as Citigroup and Related Parties.
In accordance with ASC 450, Citigroup establishes accruals for contingencies, including any litigation, regulatory, or tax matters disclosed herein, when Citigroup believes it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Once established, accruals are adjusted from time to time, as appropriate, in light of additional information. The amount of loss ultimately incurred in relation to those matters may be substantially higher or lower than the amounts accrued for those matters. With respect to previously incurred loss contingencies for which recovery is expected, Citi applies loss recovery accounting when disputes and uncertainties affecting recognition are resolved.
If Citigroup has not accrued for a matter because the matter does not meet the criteria for accrual (as set forth above), or Citigroup believes an exposure to loss exists in excess of the amount accrued for a particular matter, in each case assuming a material loss is reasonably possible but not probable, Citigroup discloses the matter. In addition, for such matters, Citigroup discloses an estimate of the aggregate reasonably possible loss or range of loss in excess of the amounts accrued for those matters for which an estimate can be made. At September 30, 2022, Citigroup estimates that the reasonably possible unaccrued loss for these matters ranges up to approximately $1.2 billion in the aggregate.
As available information changes, the matters for which Citigroup is able to estimate will change, and the estimates themselves will change. In addition, while many estimates presented in financial statements and other financial disclosures involve significant judgment and may be subject to significant uncertainty, estimates of the range of reasonably possible loss arising from litigation, regulatory, tax, or other matters are subject to particular uncertainties. For example, at the time of making an estimate, Citigroup may only have preliminary or incomplete information about the facts underlying the claim; its assumptions about the future rulings of the court or other tribunal on significant issues, or the behavior and incentives of adverse parties, regulators, or tax authorities may prove to be wrong; and the outcomes it is attempting to predict are often not amenable to the use of statistical or other quantitative analytical tools. In addition, from time to time an outcome may occur that Citigroup had not accounted for in its estimates because it had deemed such an outcome to be remote. For all these reasons, the amount of loss in excess of amounts accrued in relation to matters for which an estimate has been made could be substantially higher or lower than the range of loss included in the estimate.
Subject to the foregoing, it is the opinion of Citigroup’s management, based on current knowledge and after taking into
account its current accruals, that the eventual outcome of all matters described in this Note would not be likely to have a material adverse effect on the consolidated financial condition of Citigroup. Nonetheless, given the substantial or indeterminate amounts sought in certain of these matters and the inherent unpredictability of such matters, an adverse outcome in certain of these matters could, from time to time, have a material adverse effect on Citigroup’s consolidated results of operations or cash flows in particular quarterly or annual periods.
For further information on ASC 450 and Citigroup’s accounting and disclosure framework for contingencies, including for any litigation, regulatory, and tax matters disclosed herein, see Note 27 to the Consolidated Financial Statements in Citi’s 2021 Form 10-K.

Foreign Exchange Matters
Antitrust and Other Litigation: On August 22, 2022, in NYPL v. JPMORGAN CHASE & CO., ET AL., the United States Court of Appeals for the Second Circuit denied plaintiffs’ petition seeking appellate review of the decision denying class certification. Additional information concerning this action is publicly available in court filings under the docket numbers 15-CV-9300 (S.D.N.Y.) (Schofield, J.) and 22-698 (2d Cir.).
On October 4, 2022, in MICHAEL O’HIGGINS FX CLASS REPRESENTATIVE LIMITED v. BARCLAYS BANK PLC AND OTHERS and PHILLIP EVANS v. BARCLAYS BANK PLC AND OTHERS, the U.K.’s Competition Appeal Tribunal granted permission to both claimants to appeal its March 31, 2022 judgment on certification. Additional information concerning these actions is publicly available in court filings under the case numbers 1329/7/7/19 and 1336/7/7/19.

Interbank Offered Rates-Related Litigation and Other Matters
Antitrust and Other Litigation: On September 13, 2022, in MCCARTHY, ET AL. v. INTERCONTINENTAL EXCHANGE, INC., ET AL., the United States District Court for the Northern District of California granted defendants’ motions to dismiss for lack of antitrust standing, but granted plaintiffs leave to amend. On October 4, 2022, plaintiffs filed an amended complaint. Plaintiffs continue to allege that defendants conspired to fix ICE LIBOR, assert claims under the Sherman Act and the Clayton Act, and seek declaratory relief, injunctive relief, and treble damages. Additional information concerning this action is publicly available in court filings under the docket number 20-CV-5832 (N.D. Cal.) (Donato, J.).

Madoff-Related Litigation
In the actions brought by the trustee appointed for the Securities Investor Protection Act liquidation of Bernard L. Madoff Investment Securities LLC (BLMIS), on September 27, 2022, the United States Bankruptcy Court for the Southern District of New York denied the motion to dismiss filed by Citibank, Citicorp North America, and CGML. Additional
information concerning these actions is publicly available in
court filings under the docket numbers 10-5345, 12-1700
(Bankr. S.D.N.Y.) (Morris, J.); 12-MC-115 (S.D.N.Y.) (Rakoff, J.); and 17-2992, 17-3076, 17-3139, 19-4282, 20-1333 (2d Cir.).
In the actions brought by liquidators of Fairfield Sentry Limited, on August 24, 2022, the United States District Court for the Southern District of New York affirmed various decisions of the bankruptcy court, which dismissed claims against Citibank NA London, Citigroup Global Markets Ltd. (CGML), Citivic Nominees Ltd., Citibank (Switzerland) AG, Cititrust Bahamas Ltd., and Citibank Korea Inc., and sustained a single claim against Citibank NA London, CGML, Citivic Nominees Ltd., and Citibank (Switzerland) AG. Beginning on September 26, 2022, the liquidators filed notices of appeal, and on September 30, 2022, the defendants sought review of the district court’s decision with respect to the remaining claim. Additional information concerning these actions is publicly available in court filings under the docket numbers 10-13164, 10-3496, 10-3622, 10-3634, 10-4100, 10-3640, 11-2770, 12-1298, 12-1142 (Bankr. S.D.N.Y.) (Morris, J.); 19-3911, 19-4267, 19-4396, 19-4484, 19-5106, 19-5109, 19-5135, 21-2997, 21-3243, 21-3526, 21-3529, 21-3530, 21-3998, 21-4307, 21-4498, 21-4496 (S.D.N.Y.) (Broderick, J.); and 22-2101, 22-2557, 22-2122, 22-2562, 22-2216, 22-2545, 22-2308, 22-2591, 22-2502, 22-2553, 22-2398, 22-258 (2d Cir.).

Record-Keeping Matters
In September 2022, Citigroup Global Markets Inc. (CGMI) entered into a resolution with the U.S. Securities and Exchange Commission (SEC), and CGMI, Citibank, and Citigroup Energy Inc. (CEI) entered into a resolution with the U.S. Commodity Futures Trading Commission (CFTC), to resolve the SEC’s and CFTC’s respective investigations regarding compliance with record-keeping obligations in connection with business-related communications sent over unapproved electronic messaging channels. Under these resolutions, a $125 million civil monetary penalty was paid to the SEC, and a $75 million civil monetary penalty was paid to the CFTC.

Revlon-Related Wire Transfer Litigation
On September 8, 2022, the United States Court of Appeals for the Second Circuit ruled in Citi’s favor and vacated the judgment of the district court, which had been in favor of the defendants. On September 22, 2022, the defendants filed a petition for rehearing and rehearing en banc, which the Court of Appeals denied. Additional information concerning this action is publicly available in court filings under the docket numbers 20-CV-6539 (S.D.N.Y.) (Furman, J.) and 21-487 (2d Cir.).


Shareholder Derivative and Securities Litigations
On August 2, 2022, a shareholder derivative action captioned LIPSHUTZ et al. v. COSTELLO et al. was filed in the United States District Court for the Eastern District of New York, purportedly on behalf of Citigroup (as nominal defendant) against Citigroup’s current directors. The action raises substantially the same claims and allegations as IN RE CITIGROUP INC. SHAREHOLDER DERIVATIVE LITIGATION. The LIPSHUTZ action additionally asserts that plaintiffs made a litigation demand on the Citigroup Board of Directors and that the demand was wrongfully refused. On October 20, 2022, defendants moved to transfer the new action to the United States District Court for the Southern District of New York. Additional information concerning these actions is publicly available in court filings under the docket numbers 22 Civ. 4547 (E.D.N.Y.) (Kovner, J.) and 1:20-CV-09438 (S.D.N.Y.) (Preska, J.).

Sovereign Securities Litigation
Antitrust and Other Litigation: On September 15, 2022, in IN RE MEXICAN GOVERNMENT BONDS ANTITRUST LITIGATION, plaintiffs filed a notice of appeal to the United States Court of Appeals for the Second Circuit from the district court’s order dismissing certain defendants, including Citibanamex, for lack of personal jurisdiction. Additional information concerning this action is publicly available in court filings under the docket numbers 18-CV-2830 (S.D.N.Y.) (Oetken, J.) and 22-2039 (2d Cir.).

Settlement Payments
Payments required in any settlement agreements described
above have been made or are covered by existing litigation or
other accruals.