Citi to Pay $285M to Settle Charges it Misled Investors

Citigroup (NYSE: C: 30.59, +0.71, +2.38%) agreed on Wednesday to pay $285 million to settle charges from regulators that it misled investors in a complex mortgage security that imploded during the housing market crash. The charges stem from a $1 billion collateralized debt obligation known as Class V Funding III that New York-based Citi bet against despite having structured and marketed the security to investors, the Securities and Exchange Commission alleges. The SEC said Citi “negligently misrepresented” and was “materially misleading” to the investors in the CDO. The agency also said Citi didn't tell investors in marketing materials that it had handpicked about half of the assets in the security.

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