(FORTUNE Magazine) – Citigroup's recent announcement that it was taking big charges for litigation expenses rising out of the corporate and stock market scandals of the past few years left its shareholders choking on some very large figures. They begin with $2.65 billion that Citi will pay to settle up WorldCom and continue with reserves of billions for lawsuits still in the courts.

Here, though, is the figure to concentrate on: $9.8 billion. That's the amount that Citi has so far spent or committed to spend (as in WorldCom) or reserved to spend (for Enron, as an example) on the scandals. After taxes, the pain falls to $6.25 billion. But here's how massive even that figure is: It significantly exceeds the record profit that Citi made in its global corporate and investment bank in 2003, when that operation earned $5.39 billion. In other words, the litigation charges wiped out that amount and more.

Furthermore, though Citi CEO Charles "Chuck" Prince has emphasized how conservatively the reserves were set, these are simply estimates and could prove inadequate. And the reserves don't even pretend to address some other thorny legal problems. One matter, just disclosed, is a Securities and Exchange Commission investigation into Citi's accounting for Argentine problems it had two years ago, some relating to corporate loans that lost value.

This pack of misadventures recalls the onetime lament of Citi's former co-CEO, John Reed, who concluded that in Citi's then-186-year history it had probably not made any money on the corporate side of the business. Said Reed in a 1998 speech: "I really wish that my job were to run only the consumer side.... But I have been destined--you know, God punishes us all--to be constantly surrounded by the other part of the business, which inevitably gets us into trouble."

Co-CEO Sandy Weill strongly disputed that thought then. But for the moment the advantage in this argument seems to be Reed's. Not that it's probably the No. 1 thing on Reed's mind. As New York Stock Exchange chairman, he is being punished once more by God in having to deal with the Dick Grasso mess.

--Carol J. Loomis