Citigroup to Pay $285 Million Over SEC’s CDO Fraud Claims
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Citigroup Inc., the third-biggest U.S. lender, agreed to pay $285 million to settle U.S. regulatory claims it misled investors about a $1 billion financial product linked to risky mortgages that defaulted within months of its sale.
Citigroup structured and sold the collateralized debt obligation in 2007 without telling investors that it helped pick about half the underlying assets and was betting they’d decline in value, the Securities and Exchange Commission said in a statement today. Credit Suisse Group AG agreed to pay $2.5 million for its role in selecting the assets, the SEC said.