Citigroup agreed to pay $590 million to settle a class-action lawsuit with shareholders who said the bank misled them regarding its exposure to subprime mortgage debt. The plaintiffs said Citi used improper accounting practices to conceal the size of its faltering portfolio in credit default swaps. In a statement, Citi denied the allegations and insisted, of course, that it is "fundamentally a different company today than at the beginning of the financial crisis."

Louis Freeh, trustee for MF Global's holding company, called for a global settlement that would end his feud with James Giddens, the trustee for MF Global's brokerage company, according to The New York Times.

Chinese banks appear to be among the coterie of global lenders to have flouted U.S. sanctions against Iran, The New York Times reports.

Shares in Yelp jumped yesterday in what The Wall Street Journal is confident in labeling a short squeeze.

The Journal sees Wall Street regulators throwing "sharp elbows" at each other in the competition for big cases and big headlines.

Latvia is a "Swiss-style" banking center for ex-Soviet cash, according to Bloomberg.

France's prime minister Jean-Marc Ayrault says the 75 percent tax against high wage earners would be part of a collective national recovery effort. Business leaders said...the tax would hurt business.

German chancellor Angela Merkel said that Europe had an "absolute political will" to stabilize the euro. Italy's successful bond offering today indicates that investors believe the European Central Bank will intervene in sovereign debt markets.

Deposits in German banks rose 4.4 percent against the year before, as uh, Greeks, Spanish and Irish wised up.

European takeovers are down 23 percent year-to-date, by the way.

Ben speaks: Federal Reserve Chairman Ben Bernanke said the central bank was watching the European situation closely, but gave no indication that further monetary stimulus was imminent.

The Fed will hold all U.S. banks to the regulatory schema known as Basel III, and The Wall Street Journal is shocked that smaller lenders weren't exempted.

Mr. Bernanke also warned Congress not to ignore the so-called fiscal cliff that arrives when Bush tax cuts expire at the end of 2012. “If you all go on vacation, it’s still going to happen,” he said.

Here all week: The New York Times' Peter Lattman reports on Goldman Sachs CEO Lloyd Blankfein's testimony yesterday in U.S. v. Gupta. “You became the No. 1 person at Goldman Sachs,” [defense counsel Gary P.] Naftalis said. Mr. Blankfein corrected him. “Chairman and chief executive is my official title,” Mr. Blankfein said. He then broke into a smile. “No. 1’s not an official title.” Blankfein will testify today, as the trial drags on.

Shareholders spring: Chesapeake Energy holds its annual shareholder meeting today in Oklahoma City. Could be a good one.

So sorry: Nomura Holdings apologized to shareholders for its involvement in three insider-trading cases.

Oops: Floyd Norris says MF Global was yet another case of accounting practices that "produced profits that vanished before they were actually realized."

After Goldman: Paul Deighton, a Goldman Sachs investment banker for 22 years, is the guy running the show at the London Olympics.

Banker passes: Former Wachovia chief executive officer John Medlin died at 78.

Louis Freeh, the trustee unwinding the MF Global parent company under Chapter 11, said the firm moved some of its risky bets on European debt into an unregulated entity to avoid demands that the firm set aside capital in case the bets went bad. James Giddens, meanwhile, the trustee liquidating the firm's brokerage unit, provided some lovely graphic examples of how assets moved within the firm (H/t Alphaville):

According to The Times' reading of the Freeh report, MF Global and its CEO, Jon S. Corzine, haggled with its regulators FINRA and the SEC before agreeing to set aside additional funds to cover potential losses on proprietary bets on Belgian, Irish, Italy, Spanish, Portuguese and Italian bonds.

While MF Global did move some cash around to protect against losses, the firm also transferred its roughly $3 billion in holdings of Italian bonds from the brokerage arm of the company to the “FinCo,” according to the report. By doing so, the firm met its requirements without having to raise money.

Mr. Freeh said that the firm's creditors, including lenders, institutional investors and service providers, could seek as much as $3 billion in claims. For his part, Mr. Giddens is deciding whether to charge Mr. Corzine and other executives with "breach of fiduciary duty and negligence."

Questions for Jamie: Andrew Ross Sorkin has some questions for Jamie Dimon ahead of the JPMorgan chief executive's visit with the Senate Banking Committee on June 13. The hearing should be used as an opportunity to draw out information on the risks in the U.S. banking system, and not merely another performance of "Washington Gotcha Theater."

JPMorgan may report a second-quarter loss of $4.2 billion in its chief investment office, ISI analyst Ed Najarian said in a research note.

Whither Europe: A Spanish budget minister urged European leaders to move faster to support Spain's floundering banks, noting that spiking borrowing rates left Spain effectively locked out of capital markets.

Shall we lunch? Goldman Sachs CEO Lloyd Blankfein testified in the insider trading trial of former-McKinsey & Co. boss Rajat Gupta yesterday, but The Times reports the testimony was largely uneventful. The lone bright spot? Mr. Blankfein asked if the court would schedule the continuation of his testimony around a lunch the bank boss had planned for his daughter's high school graduation. The Blankfeins' reservation was for a restaurant in Yonkers, where Judge Jed Rakoff lives. Did His Honor know the place? “If it’s the one I’m thinking of, I can’t afford it,” Judge Rakoff said.

KKR brass tops list: Henry Kravis was the most highly paid executive at large U.S. financial firms last year, earning $30 million in salary and other compensation, while partner George Roberts was second at $29.9 million, according to Bloomberg Markets Magazine. Mr. Kravis and Mr. Roberts, founding partners of KKR, the private equity firm that went public in 2010, took home an additional $64.2 million in dividends and other distributions accrued to their stakes in the company.

Emerging market: Steve Wynn's newest Macau casino will cost $4 billion to build, even as the island-gambling destination reported slower revenue growth.

Banker passes: Marion O. Sandler, the pioneering Wall Street woman who built Golden West Financial into one of the largest thrifts in the country, is dead at 81. Ms. Sandler and her husband Herbert sold Golden West to Wachovia in 2006, and came in for a share of blame when the bottom fell out of the U.S. housing market. The Sandlers sank much of the $2.4 billion they reaped from the Golden West sale into charities, The Times reports, including ProPublica, the investigative journalism outfit.

Whither Europe: European governments have about three months to save the monetary union, George Soros said at the Festival of Economics: "I expect that the Greek public will be sufficiently frightened by the prospect of expulsion from the European Union that it will give a narrow majority of seats to a coalition that is ready to abide by the current agreement. But no government can meet the conditions so that the Greek crisis is liable to come to a climax in the fall. By that time the German economy will also be weakening so that Chancellor Merkel will find it even more difficult than today to persuade the German public to accept any additional European responsibilities. That is what creates a three months’ window."

Investors wonder whether central bankers can come to the rescue again, as Europe signals another tumultuous summer for markets.

Self-defense: Securities and Exchange Commission Enforcement Director Robert Khuzami defended his agency's low tally of prosecutions against top investment banking officials for charges arising out of the financial crisis. For one thing, said Khuzami, decisions on mortgage-backed securities weren't made at banks' highest levels. For another: “We are responsible for regulating 35,000 entities, and yet we are about the size of the D.C. police force.”

The SEC investigator suspended last month after he confided in co-workers his desire to carry a handgun had previously applied for a permit to carry a concealed weapon, but was denied.

One insider trader hit the speaking circuit, hoping to build up some goodwill ahead of his sentencing today.

What's in a hedge? Rule makers contemplate the Volcker rule and JP Morgan's recent $2.3 billion "hedging" loss.

Fee fie: Bankruptcy lawyers are under pressure to justify fees that often exceed $1,000 per hour. The lawyers will have their chance to defend themselves today, at a public meeting with the Justice Department's Trustee Program.

Golden oldies: AIG CEO Robert Benmosche looks to the European debt crisis and sees retirement ages moving as high as 80.

Citi's country-bred whistle-blower:

Whither Europe: The story of the Spanish banking system goes something like this: Banks need capital infusions to offset losses on real estate loans. The Spanish government's lender bailout fund lacks adequate cash to prop up banks. Short on funds, the ailing banks are tightening credit, affecting a further strangulation of the nation's struggling economy, in turn worsening the plight of the banks. Europe should step in and create a model for bank recapitalization across the region, says one editorial page. Here's how.

A common reaction to Spain's woes? A flight to quality. That goes for investors seeking safer havens, and squatter occupying abandoned apartments.

Spanish banks are giving away Spiderman towels as an incentive to keep young depositors from withdrawing savings. What?

Cautious prince: When Scott Devitt replaced Mary Meeker as Morgan Stanley's tech analyst, he shunned the flashy profile that had attached to the "Queen of the Internet." A cautious analyst in a world of Internet bulls, Mr. Devitt has been known for his contrarian calls—now he's known for cutting guidance on Facebook in the days before the company IPO'd. Reuters goes deep, and finds that Mr. Devitt is the kind of guy who drives cars into the ground and expresses his sense of humor on his LinkedIn page.

Risky business: JPMorgan's investment bank and JPMorgan's chief investment office—the unit responsible for at least $2.3 billion in trading losses associated with the so-called London Whale—may have valued the disastrous derivatives positions at different prices, which Bloomberg suggests may have obscured the firm's losses by hundreds of millions of dollars.

Also from Bloomberg: There's no substitute for capital buffers when it comes to hedging risk.

What problem? Moody's downgraded eight Danish banks, citing a "weak operating environment"; Danske Bank, Denmark's largest lender, said it “does not understand Moody’s very negative view.”

Slow summer:Between the Facebook flop and turmoil in Europe, it's going to be a sluggish market for IPOs. Kayak, the discount travel website, and Graff Diamonds, a high-end jeweler, each stepped back from prospective offerings yesterday. It may be the bad taste left by Facebook's IPO—the stock plummeted more than 20 percent in little over a week—or the teetering economies in Greece and Spain. Investors are spooked, and Kayak and Graff took note.

Mark Zuckerberg lost $4.7 billion in personal wealth as Facebook's stock plummeted, edging the 28-year-old tycoon off the Bloomberg Billionaire Index.

Slow money: MF Global customers seeking to sell their claims on the bankrupt commodities dealer for quick cash appear to out of luck. The complexity of the claims is scaring away buyers; in a simpler bankruptcy, perhaps 20 percent of claims would trade between creditors seeking immediate cash and investors, the Wall Street Journal reports.

Slow BRICs: Investors buying Citigroup's debt are failing to price in risks associated with the lender's push into emerging markets. With China and Brazil facing economic slowdowns, Citi's bonds could lag those of its peers.

Change of tide? François Hollande defeated Nicolas Sarkozy, as expected, in a runoff election, installing as French president a socialist party leader who has promised to revisit austerity plans negotiated between Mr. Sarkozy and German Chancellor Angela Merkel. In Greece, voters shifted support away from political mainstays to extreme parties, placing the future of austerity in that country in question. The "bitter reality" of the European economic situation may preclude Mr. Hollande from straying too far from his predecessor's path.

In Greece, on the other hand, the election results increase chances that the country will exit the euro to 50-75 percent, according to two Citigroup economists, though they say that a broad break-up of the monetary union is unlikely.

Zero Hedge has your guide to Europe for Dummies.

Preferred customers: Some MF Global clients have recovered holdings from the failed broker, while others have yet to see a dollar, the Wall Street Journal reports. The difference: where the clients invested their money. Funds invested in the U.S. have been at repaid 72 percent, but regulatory quirks leave those with money invested overseas waiting to recover funds.

Seeking allies: Reuters digs into the state of affairs at Ally Financial, "one of the least scrutinized bailouts of the financial crisis," and hears that mortgage-lending unit ResCap may be placed in bankruptcy within the next week. Ally, meanwhile, has been the victim of competing interests internally and lax government oversight. With indications that General Motors and Chrysler are less likely to auto loans to Ally, the Treasury's 74 percent stake in the company could lose value.

Buffett bailouts: Warren Buffett said his investments in Goldman Sachs and General Electric were of little importance to Berkshire Hathaway when compared to longer-term stock holdings and company acquisitions. Buffett invested a combined $8 billion in the two companies in the depths of the financial crisis, but profits from those deals are just "peanuts," according to Bloomberg. “They’re not remotely as important as buying Coca-Cola stock,” Buffett said at Berkshire's annual meeting on Saturday. “The values in Berkshire that have been accumulated by some special security transaction are really just peanuts compared to buying businesses like Geico, or Iscar or BNSF.”

Public equity: The Washington Post gains access to the Carlyle Group dealmakers behind the 2005 takeover of a beleaguered auto parts company, and finds unsentimental capitalists wielding "a blunt instrument to reorder unproductive businesses and create vast wealth." Which is a mighty good thing, when it works.

Hiring rebound: New job openings in the City of London rose 9 percent in April from the month prior, as liquidity from the European Central Bank drove staffing in fixed income units, and lenders continued to take on compliance experts in adapting to new regulations. Openings are still down 27 percent from the year before, according to the Financial Times.

Bang the drum slowly: Management at embattled Dewey & LeBouef acknowledged in a Friday afternoon memo that the firm may close and employees may lose their jobs, Dealbook reports. They might have guessed something was up when the firm closed the mailroom and copy center.

[KENZO TRIBOUILLARD/AFP/GettyImages]

Here's one unexpected (but tough to pity) victim of the MF Global meltdown: Mayor Michael Bloomberg.

When the brokerage filed for bankruptcy, Bloomberg LP lost 600 terminal subscribers, or about $1 million in monthly revenue, The New York Times reports, causing the company to miss target sales by 12 percent and possibly taking a toll on bonuses.

Sales of the Bloomberg terminal, a finance industry must-have, fund the vast majority of Bloomberg LP's journalism outfit. As a result, the size of its reporting staff is  closely linked to the health of the economy.

But things aren't so bad yet: Bloomberg View executive editor David Shipley added five journalists to the editorial board today.

• Katy Roberts, The New York Times Week in Review editor
• James Gibney, features editor at The Atlantic
• Michael Newman, politics editor at Slate
• Marc Champion, Istanbul bureau chief at The Wall Street Journal
• Deborah Solomon--no, not that Deborah Solomon--economic policy reporter at The Wall Street Journal