Citi, Wachovia To Pay $878M To Settle ARS Probe

Law360, New York (April 15, 2009, 12:00 AM EDT) -- The brokerage units of Citigroup Inc. and Wachovia Corp. have reached global settlements to put an end to an investigation of claims that the firms concealed the liquidity risks of investing in the doomed auction rate securities market.

Under the deal, announced Wednesday by Michigan's Office of Financial and Insurance Regulation, Citigroup Global Markets Inc. and Wachovia Capital Markets will pay fines totaling more than $2.3 million and offer full ARS buybacks to eligible customers.

Citigroup will offer to repurchase up to $717 million of the...
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