Now, about that Citi muddle… | FT Alphaville

Now, about that Citi muddle…

Some confusion in the market for C. on Thursday, after this story was published on Bloomberg:

July 15 (Bloomberg) — Citigroup Inc. said it misclassified as much as $9.2 billion of repurchase agreements and $1.9 billion of securities lending transactions as sales during the past three years. The errors, which the bank described as unintentional and “not material,” were disclosed in a letter from the New York-based bank to the Securities and Exchange Commission released today.

Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co. said in letters to the SEC also released today that they didn’t misclassify repurchase agreements.

That’s accurate, except for the bit about the letter being released today. What the journalist meant to say is that the information was in a letter found by Bloomberg today.

As Alea was quick to point out over on Twitter, Dow Jones Newswires reported on this weeks ago.

In fact, it is was not immediately clear how long the relevant correspondence has been sitting on the SEC Edgar database, through which all price sensitive information is released in the US.

While EDGAR is open to the public and supposedly exists to offer transparency to all investors, the system often has the opposite effect because it’s so stupidly difficult to use.

Now, some journalists know there are special ‘cheats’ you can use on EDGAR to find stuff that would otherwise pass most people by.

In the interests of fairer markets – and using Citi as an illustrative example – we at FT Alphaville are now happy to blow the whistle on a couple of these key EDGAR cheats. But bear with us, because they are not straightforward…

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How to do a Citi doc hunt on EDGAR

1. Go to the EDGAR company search page and enter ‘C’ in the ticker symbol field. Click ‘find companies’. You will be presented with a page listing the last 40 SEC filing documents from Citigroup Inc.

2. Now, for the first ‘cheat’ enter the letters CORRES in the ‘filing type’ field and then click ‘search’ over on the right. You will be presented with a list of documents that are actually letters from Citi to the SEC – a total of four for 2010.

3. Click on the second “Documents’ button for the filing dated April 30.  Then click the document link that reads filename1.htm. That will give you this letter from John Gerspach, Citi’s CFO, to John Nolan at the SEC.

There you can read Gerspach’s toe-curling explanation as to how an accounting screw-up covering up to $9.2bn of repos was…

…an inadvertent, unintentional error, which resulted from a control deficiency that did not rise to the level of a significant deficiency or a material weakness in Citi’s internal control over financial reporting…

But to find what the SEC said to Citi in the first place you need a second EDGAR ‘cheat.’ So…

4. Click your ‘back’ button until you are at this ‘filter results’ page. Instead of ‘CORRES’ in the ‘filing type’ box enter our second cheat: UPLOAD. Then clicking ‘search’ on the right will give you a list of SEC letters to Citi – six in total this year.

5. Click the first document, for the April 26 filing date and then click filename1.pdf.

Voila!  You get this letter from the SEC to Citi, demanding answers, sharpish.

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