SEC, Citigroup in Talks to Settle Mortgage-Bond Deal, WSJ Says

The Securities and Exchange Commission is in “advanced” talks with Citigroup Inc. (C) to settle charges related to a $1 billion mortgage-bond deal, The Wall Street Journal reported, citing people familiar.

The settlement would be for more than $200 million, the newpaper said, citing the people it didn’t identify.

The deal, called Class V Funding III, was a collateralized debt obligation made up of other CDOs and backed by subprime mortgages, the Journal said. It was created in 2007, the WSJ said.

Officials are looking into whether Citigroup held any short positions in the deal, the Journal said.

Danielle Romero-Apsilos, a spokeswoman for Citigroup, declined to comment on the report to Bloomberg News.

To contact the editor responsible for this story: Sylvia Wier at swier@bloomberg.net

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