Citigroup CDOs were known to be a disaster
In a hearing today, former Citigroup (NYSE:C) executives said their warnings of troubled mortgages, which included over half the CDOs, which were bad mortgages used to create bonds, where the bonds had a AAA rating in spite of the underlying problem mortgages. That was according to Richard Bowen who used to work at Citigroup as the head underwriter.
Bowen alleged he communicated with a number of top executives about the mortgage troubles at Citigroup, but was for the most part ignored.
Citigroup chairman Robert Rubin was one of those cited as not responding to the warnings, and he will have a chance to answer those allegations when he appears before the committee on Thursday.
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