For $7 billion, Citigroup Inc. agreed to settle charges it misled investors on the stability of auction-rate securities used to pool capital for loans.
On the heels of Citigroup”™s deal with New York Attorney General Andrew Cuomo, UBS AG was working on a similar settlement, according to a report in the Financial Times. The Swiss bank has a large Stamford office that numbers it among the largest employers in Fairfield County.
Under Cuomo”™s settlement, Citigroup agreed to buy back all auction-rate securities from 40,000 retail customers, charities, and small- and mid-sized businesses, which have been unable to sell them since February.
As part of the settlement, Citigroup is paying $50 million fines to both the state of New York and the North American Securities Administrators Association.
“Today”™s settlement sends a resounding message to the entire auction rate securities industry: This type of deceptive behavior will not be tolerated,” Cuomo said, in a written statement. “Our goal is simple: to get investors back their money, and that”™s exactly what this deal does.”
