By Rachelle Younglai and Jonathan Stempel
WASHINGTON/NEW YORK (Reuters) - Citigroup Inc on Monday urged a federal judge to approve a proposed $75million settlement with U.S. regulators over its failure todisclose mounting losses on subprime mortgages.
In a court filing, Citigroup called the accord "fair,adequate, reasonable and appropriate."
The third-largest U.S. bank by assets is hoping to convinceU.S. District Judge Ellen Segal Huvelle to approve thesettlement with the U.S. Securities and Exchange Commission,four weeks after she refused to do so.
A published report quoted her at the time as saying sherefused to be a "rubber stamp."
The SEC accused Citigroup of misleading investors bytelling them from July to October 2007 that its exposure tosubprime securities was only about $13 billion, only to revealthat November that the sum was more than $52 billion.
Soaring losses from risky debt led to a series of bailoutsthat left the government owning one-third of Citigroup, a stakeit has been reducing. Citigroup shares, which traded above $50in July 2007, closed Monday up 8 cents at $3.99.
In its filing, Citigroup said "the individuals involved inpreparing the relevant disclosures acted in good faith," and thatonly in hindsight might it be "tempting" to question what they hadthought at the time.
Upon realizing it misjudged the risk of its debt, Citigroup"promptly" made additional disclosures, including plans to takebillions of dollars of additional write-downs, the filing said.
Citigroup also said settling avoids possible "public andcostly litigation" with the SEC, one of its main regulators.
In a Sept. 8 filing, the SEC also urged Huvelle to approvethe settlement, which it called "fair, adequate, reasonable andin the public interest." It said it based the fine on how muchCitigroup might have saved on bond issuances as a result of thelesser, earlier disclosures.
Citigroup agreed with the SEC that top officials, includingthen-Chief Executive Charles Prince and then-senior adviserRobert Rubin, were aware in the second half of 2007 that somehigher-rated subprime mortgages were causing losses.
But the SEC said it decided to charge only former CitigroupChief Financial Officer Gary Crittenden and former Citigroupinvestor relations chief Arthur Tildesley.
Crittenden and Tildesley agreed to pay $100,000 and $80,000to settle respective administrative proceedings. Neither theynor Citigroup admitted wrongdoing in agreeing to settle.
Huvelle will hold a status conference Sept. 24.
The case is SEC v. Citigroup Inc, U.S. District Court,District of Columbia, No. 10-01277. (Reporting by Maria Aspan, Rachelle Younglai and JonathanStempel; Editing by Steve Orlofsky, Phil Berlowitz)