Citigroup to pay $285 mln to settle SEC charges
WASHINGTON. October 21. KAZINFORM U.S. Securities and Exchange Commission (SEC) announced Wednesday that Citigroup agreed to pay 285 million U.S. dollars to settle charges by SEC against its principal U.S. broker-dealer subsidiary for misleading investors about a one-billion-dollar collateralized debt obligation (CDO); Kazinform refers to Xinhua.
Under the settlement, Citigroup was required to pay 160 million dollars in disgorgement plus 30 million dollars in pre-judgement interest and a 95-million-dollar penalty for a total of 285 million dollars that would be returned to investors, said the SEC.
The SEC alleged that Citigroup Global Markets structured and marketed a CDO, which was tied to the U.S. housing market in which Citigroup bet against investors as the housing market showed signs of distress. The CDO defaulted within months, leaving investors with losses while Citigroup made 160 million dollars in fees and trading profits; Kazinform cites Xinhua.
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