Citigroup announces $285 million settlement in negligence suit

SEC cracks down after bank allegedly misled investors about a $1 billion collateralized debt obligation

Citigroup Inc. yesterday agreed to settle negligence charges from 2006 and 2007 for $285 million based on charges brought by the Securities and Exchange Commission (SEC). The bank’s primary broker-dealer subsidiary, Citigroup Global Markets Inc., allegedly mislead its investors about a $1 billion collateralized debt obligation (CDO).

The SEC’s director of the Division of Enforcement, Robert Khuzami, said in a statement that the investors deserved better treatment than Citigroup afforded them.

Danielle Feinstein

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