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Citi gets notice on Mexico dealing

Citibank said it has received subpoenas from the Federal Deposit Insurance Corp and U.S. prosecutors, three days after the bank disclosed it had found allegedly fraudulent billings at its Mexico unit that cost it up to $400 million. A regulatory filing by the bank had disclosed that the group and related parties – including the U.S. unit of its Mexico business, Banco Nacional de Mexico, or Banamex – have received grand-jury subpoenas issued by the U.S. Attorney’s Office for the District of Massachusetts tied to anti-money-laundering requirements. Meanwhile, Citigroup’s exposure to Russia and Ukraine came under the spotlight. The instability in the region hammered stocks and bank stocks in particular. Of major U.S. banks, Citigroup shares fell the most Monday, losing 2.1% to $47.61. As of the fourth quarter, Citigroup had about $10.3 billion in total net exposure to the Russian Federation, the most of the big four U.S. commercial banks, according to RBC analyst Gerard Cassidy. In recent days, one of the group’s big strong spots internationally, Mexico, has garnered negative attention. The bank said it was cutting its fourth-quarter and full-year results by about $235 million after tax. That adjustment came after the bank investigated its dealings with a Mexican oil-services company, Oceanografía SA de CV and found an apparent gap of $400 million in an account that owed money to Citigroup’s Mexico unit.

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