December 24, 2002	Tuesday	Shawwal 19, 1423

NEW YORK, Dec 23: Citigroup, the world’s biggest bank, said on Monday it would take a 1.5-billion-dollar charge, mostly to cover fallout from a stock research scandal, but that it still expected record 2002 profits.

US regulators announced on Friday that top Wall Street banks and brokers would pay $1.435 billion and overhaul their ethics practices to settle alleged abuses in stock research.

Private litigation still hangs over the institutions, which are accused of deliberately providing investors with over-optimistic research on companies that they knew to be weak.

They allegedly did so to lure investment banking business from the companies involved. As part of the Wall Street settlement, Citigroup’s Salmon Smith Barney will pay a total $400 million. Salomon Smith Barney agreed to pay $300 million in retrospective relief, $75 million to fund investment research and $25m for investor education.

“We will take a charge in the fourth quarter toward the anticipated cost of resolving regulatory inquiries and associated litigation, as well as increased credit losses,” Citigroup chairman and chief executive Sanford Weill said in a statement.

Citigroup said it was establishing a reserve to cover the cost of the settlement with regulators and the estimated costs of related private litigation.

The reserve also would cover Citigroup’s exposure to regulatory inquiries and private litigation related to Enron Corp., which collapsed last year in a welter of accounting scandals.—AFP