Citigroup May Settle Auction-Rate Securities Claims
Citigroup may buy back more than $5 billion worth of auction-rate securities and pay up to a $100 million fine to settle allegations made by regulators that the company engaged in wrongdoing over the investments, the Wall Street Journal reports.
Citigroup, the largest U.S. bank by assets, has apparently been in talks this week with representatives from New York Attorney General Andrew Cuomo’s office, state securities regulators and regulators with the U.S. Securities and Exchange Commission.
As noted by Reuters, a settlement by Citigroup could become a model for other banks facing allegations that they misrepresented auction-rate securities as “safe as cash” investments.
Auction-rate securities are municipal or corporate debt securities or preferred stocks that pay interest at rates set through periodic auctions. The instruments typically have long-term maturity dates or no maturity date.
In mid-February, the auctions for the investment instruments failed. That meant investors were unable to sell their securities. To this day, auction-rate securities investors find themselves owning frozen assets.
Carey & Danis has filed class action lawsuits on behalf of persons who purchased auction-rate securities. Investors who wish to discuss their rights against any broker-dealer may contact Carey & Danis toll-free at 800-721-2519 or fill out our online contact form.
