The SEC is looking into the tax treatment of Citigroup’s (C) purchase of Associates First Capital in 2000. The purchase price of the sub-prime lender was over $31 billion. The accounting for tax reserves after the transaction was completed appears to be the focus of the investigation.
Citi CEO Charles Prince, already under pressure from shareholders to step down, must feel that his is snake bit. A new piece of bad news about Citi surfaces almost monthly. And, Citi’s stock continues to lag those of competitors like JP Morgan (JPM) and Bank of America (BAC).
Prince may want to leave just to get some peace.
Douglas A. McIntyre can be reached at [email protected]. He does not own securiites in companies that he writes about.
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