Citigroup To Pay $285M In SEC Mortgage CDO Suit

Law360, New York (October 19, 2011, 12:45 PM EDT) -- Citigroup Inc. on Wednesday agreed to pay $285 million to settle allegations that one of its investment banking units sold investors a $1 billion collateralized debt obligation tied to mortgages without revealing its steep short position against the security.

In a complaint filed in New York federal court, the U.S. Securities and Exchange Commission alleged that Citigroup Global Markets Inc. did not tell investors that it had helped select the residential mortgages that were bundled into the Class V Funding III while marketing the securities. The...
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