Citigroup settles debt investigation

Source: Exec Digital USA

Date :8/7/2008 6:36:59 AM

The US bank has forged a settlement with federal regulators and New York state authorities as part of a settlement of charges that it marketed the debt fraudulently.

Citigroup may buy back US$20 billion of the debt from individuals and institutions.

New York Attorney General Andrew Cuomo said that he has reached a settlement worth more than US$7 billion with Citigroup that requires the company to buy back auction-rate securities from about 40,000 customers nationwide.

Cuomo had threatened to charge the company with fraudulent sales of auction-rate securities and destruction of key documents.

The settlement requires Citigroup to buy back securities from retail customers, charities and small to midsize businesses by November 5.

Citigroup also will pay New York state a U$50 million civil penalty, and a US$50 million civil penalty to the North American Securities Administrators Association.