CONTINGENCIES

6 Months Ended

Jun. 30, 2012

CONTINGENCIES

CONTINGENCIES

22.    CONTINGENCIES

        The following information supplements and amends, as applicable, the disclosures in Note 29 to the Consolidated Financial Statements of Citigroup's 2011 Annual Report on Form 10-K and Note 22 to the Consolidated Financial Statements of Citigroup's Quarterly Report on Form 10-Q for the quarter ended March 31, 2012. For purposes of this Note, Citigroup and its affiliates and subsidiaries, as well as their current and former officers, directors and employees, are sometimes collectively referred to as Citigroup and Related Parties.

        In accordance with ASC 450 (formerly SFAS 5), Citigroup establishes accruals for litigation and regulatory matters 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 matters for which an accrual has been established may be substantially higher or lower than the amounts accrued for those matters.

        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, 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 as to which an estimate can be made. At June 30, 2012, Citigroup's estimate was materially unchanged from its estimate of approximately $4 billion at December 31, 2011, as more fully described in Note 29 to the Consolidated Financial Statements in the 2011 Annual Report on Form 10-K.

        As available information changes, the matters for which Citigroup is able to estimate, and the estimates themselves, will change. In addition, while many estimates presented in financial statements and other financial disclosure involve significant judgment and may be subject to significant uncertainty, estimates of the range of reasonably possible loss arising from litigation and regulatory proceedings are subject to particular uncertainties. For example, at the time of making an estimate, Citigroup may have only preliminary, incomplete or inaccurate 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 or regulators, 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 accruals ultimately incurred for the matters as to 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 legal 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 litigation and regulatory matters, see Note 29 to the Consolidated Financial Statements of Citigroup's 2011 Annual Report on Form 10-K.

Credit Crisis-Related Litigation and Other Matters

        Citigroup continues to cooperate fully in response to subpoenas and requests for information from the Securities and Exchange Commission, the Department of Justice and subdivisions thereof, bank regulators, and other federal and state government agencies and authorities in connection with formal and informal (and, in many instances, industry-wide) inquiries concerning Citigroup's mortgage-related conduct and business activities, and other matters related to the credit crisis.

Mortgage-Related Litigation and Other Matters

        Securities Actions:    On June 8, 2012, defendants filed an interlocutory appeal in the United States Court of Appeals for the Second Circuit from the district court's decision in INTERNATIONAL FUND MANAGEMENT S.A., ET AL. v. CITIGROUP INC., ET AL., holding that the tolling doctrine set forth in American Pipe & Construction Co. v. Utah, 414 U.S. 538 (1974), applies to the statute of repose in the Securities Act of 1933. Additional information relating to this action is publicly available in court filings under docket numbers 09 Civ. 8755 (S.D.N.Y.) (Stein, J.) and 12-1903-cv (2d Cir.).

        ERISA Matters:    On June 22, 2012, plaintiffs-appellants filed a petition for a writ of certiorari to the United States Supreme Court seeking review of the United States Court of Appeals for the Second Circuit's decision affirming the district court's dismissal of plaintiffs' complaint in GRAY v. CITIGROUP INC. Additional information relating to this action is publicly available in court filings under docket numbers 07 Civ. 9790 (S.D.N.Y.) (Stein, J.), 09-3804-cv (2d Cir.), and 11A1045 (S. Ct.).

        Mortgage-Backed Securities and CDO Investor Actions and Repurchase Claims:    On May 4, 2012, the district court in FEDERAL HOUSING FINANCE AGENCY v. UBS AMERICAS, INC., ET AL., a parallel case to FEDERAL HOUSING FINANCE AGENCY v. ALLY FINANCIAL INC., ET AL., FEDERAL HOUSING FINANCE AGENCY v. CITIGROUP INC., ET AL., and FEDERAL HOUSING FINANCE AGENCY v. JPMORGAN CHASE & CO., ET AL., denied defendants' motion to dismiss plaintiff's securities law claims and granted defendants' motion to dismiss plaintiff's negligent misrepresentation claims. On June 19, 2012, the district court granted defendants' motion to certify an interlocutory appeal to the United States Court of Appeals for the Second Circuit from the court's statutes of repose and limitations rulings. Additional information relating to these actions is publicly available in court filings under docket numbers 11 Civ. 5201, 6188, 6196 and 7010 (S.D.N.Y.) (Cote, J.) and 12-2547-cv (2d Cir.).

        On May 15, 2012, Woori Bank filed a complaint in the United States District Court for the Southern District of New

York against Citigroup and Related Parties alleging actionable misstatements and omissions in connection with Woori Bank's $95 million investment in five CDOs. Additional information relating to this matter is publicly available in court filings under docket number 12 Civ. 3868 (S.D.N.Y.) (Swain, J.).

        On May 18, 2012, the Federal Deposit Insurance Corporation filed complaints in the United States District Courts for the Southern District of New York and the Central District of California against various defendants, including Citigroup Global Markets Inc., Citicorp Mortgage Securities Inc., and CitiMortgage Inc., in connection with purchases of RMBS by two failed banks for which the FDIC is acting as receiver. Additional information relating to these actions is publicly available in court filings under docket numbers 12 Civ. 4000 (S.D.N.Y.) (Swain, J.), 12 Civ. 4001 (S.D.N.Y.) (Koeltl, J.), and 12 Civ. 4354 (C.D. Cal.) (Pfaelzer, J.).

        On June 6, 2012, the court granted in part and denied in part defendants' motions to dismiss in WESTERN & SOUTHERN LIFE INS. CO., ET AL. v. RESIDENTIAL FUNDING CO., LLC, ET AL. Additional information relating to this action is publicly available in court filings under docket number A1105042 (Ohio Ct. Com. Pl.) (Myers, J.).

        On June 26, 2012, the court overruled defendants' demurrer to plaintiff's amended complaint in FEDERAL HOME LOAN BANK OF CHICAGO v. BANC OF AMERICA SECURITIES, LLC, ET AL. Additional information relating to this action is publicly available in court filings under docket number LC-09-1499 (Cal. Super. Ct.) (Mohr, J.).

ASTA/MAT and Falcon-Related Litigation and Other Matters

        State Attorney General Subpoenas:    On June 11, 2012, the New York Attorney General served a subpoena on a Citigroup affiliate seeking documents and information concerning MAT Finance Fund LLC, ASTA Finance Fund LLC, and Falcon Strategies LLC. On August 1, 2012, the Massachusetts Attorney General served a Civil Investigative Demand on a Citigroup affiliate seeking similar documents and information. Citigroup is cooperating fully with these inquiries.

        The parties in HOSIER v. CITIGROUP GLOBAL MARKETS INC. have reached an agreement to settle the action, pursuant to which Citigroup has voluntarily dismissed its appeal in the United States Court of Appeals for the Tenth Circuit. Additional information relating to this matter is publicly available in court filings under docket numbers 11 Civ. 971 (D. Colo.) (Arguello, J.) and 12-1018 and 12-1132 (10th Cir.).

Lehman Structured Notes Matters

        On May 21, 2012, the Belgian appellate court dismissed all criminal charges and civil claims against a Citigroup subsidiary (CBB). The Prosecutor and some civil claimants have appealed this decision to the Belgian Supreme Court.

Interbank Offered Rates-Related Litigation and Other Matters

        In connection with the investigations and inquiries regarding submissions made by panel banks to bodies that publish various interbank offered rates, certain Citigroup subsidiaries have received additional requests for information and documents from various U.S. and non-U.S. governmental agencies, including the offices of the New York and Connecticut Attorneys General.

        A number of additional putative class actions were filed in the Southern District of New York against banks that served on certain interbank offered rates panels and certain of those banks' affiliates, including Citigroup affiliates. Additional information relating to these actions is publicly available in court filings under docket numbers 1:12-cv-3419 (S.D.N.Y.) (Daniels, J.), 12-cv-4205 (S.D.N.Y.) (Buchwald, J.), 1:12-cv-5280 (S.D.N.Y.) (Kaplan, J.), 12-cv-5723 (S.D.N.Y.) (Buchwald, J.), and 12-cv-5822 (S.D.N.Y.) (Buchwald, J.).

KIKOs

        As of June 30, 2012, there were 84 civil lawsuits filed by small and medium-size export businesses (SMEs) against a Citigroup subsidiary (CKI). To date, 80 decisions have been rendered at the district court level, and CKI has prevailed in 64 of those decisions. In the other 16 decisions, plaintiffs were awarded only a portion of the damages sought. The damage awards total in the aggregate approximately $19.5 million. CKI is appealing the 16 adverse decisions. A significant number of plaintiffs that had decisions rendered against them have also filed appeals, including plaintiffs that were awarded less than all of the damages they sought. In the two plaintiffs' appeals that have been decided, the decisions were in CKI's favor.

        The July 2011 decision of prosecutors not to proceed with indictments against CKI has been affirmed on appeal.

Tribune Company Bankruptcy

        On July 13, 2012, following a confirmation hearing in June on the fourth amended plan of reorganization, the court issued an order overruling objections to the plan and stating that, subject to revisions consistent with the order, the plan would be confirmed. Additional information relating to this action is publicly available in court filings under docket number 08-13141 (Bankr. D. Del.) (Carey, J.).

Interchange Litigation

        On July 13, 2012, all parties to the putative class actions, including Citigroup and Related Parties, entered into a Memorandum of Understanding (MOU) setting forth the material terms of a class settlement. The settlement described in the MOU is subject to a number of conditions, including agreement on definitive documentation of the settlement, any necessary approvals by the boards of directors of the parties, defendants' entry into settlement agreements with certain merchants that have filed separate individual actions against the Visa and MasterCard networks, and preliminary and final approval by the court. The class settlement contemplated by the MOU provides for, among other things, a total payment by all defendants to the class of $6.05 billion; a rebate to merchants participating in the class settlement of 10 basis points on interchange collected for a period of eight months by the Visa and MasterCard networks; changes to certain network rules that would permit merchants to surcharge some payment card transactions subject to certain limitations and conditions, including disclosure to consumers at the point of sale; and broad releases in favor of the defendants. The Boards of Directors of Citigroup and Citibank have approved the settlement. The court has ordered the parties to file definitive documentation of the settlement with the court for preliminary approval no later than October 19, 2012.

Parmalat Litigation and Related Matters

        On June 8, 2012, plaintiff's petition to the New Jersey Supreme Court seeking review of the appellate court ruling affirming the trial court judgment in favor of Citigroup was denied. Additional information relating to this action is publicly available in court filings under docket number A-2654-08T2 (N.J. Sup. Ct.).

Companhia Industrial de Instrumentos de Precisão Litigation In June 2012, the Supreme Court of Brazil declined to review the constitutional claims of Companhia Industrial de Instrumentos de Precisão (CIIP). CIIP has sought reconsideration of this decision.

Settlement Payments

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

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        Additional matters asserting claims similar to those described above may be filed in the future.