Citigroup’s $7 billion settlement
August 7, 2008 by Tisa Silver
Filed under Finance
Citigroup has reached a multi-billion dollar settlement with state and federal regulators stemming from accusations of fraud in the sale of auction rate securities. The accusations were made public last week by New York Attorney General Andrew Cuomo. (See my 8/2 post on how the story began here)
Citigroup officials have yet to admit or deny the accusations, but actions speak louder than words. The terms of the settlement require the bank to buy back $7 billion in auction rate securities from investors who were led to believe that the long-term bonds were safe, short-term investments.
Citigroup will also pay $100 million in fines and could face additional penalties from the SEC.
Shares of Citigroup are trading down about 4 percent this afternoon.
Comments
One Response to “Citigroup’s $7 billion settlement”Trackbacks
Check out what others are saying about this post...[...] that the market was going to collapse. A wave of ARS buyback announcements began yesterday with Citigroup, closely followed by Merrill [...]