Two units of Citigroup will pay nearly $180 million to settle financial crisis-era charges alleging they defrauded investors in two hedge funds by telling them the funds were safe, low-risk investments, U.S. regulators said Monday.
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The Securities and Exchange Commission said that Citigroup Global Markets Inc and Citigroup Alternative Investments LLC are settling without admitting or denying the charges, and that the funds will bear all of the costs for distributing the money to harmed investors.
The SEC said that the bank's two units made "false and misleading" statements to investors in both the ASTA/MAT fund and the Falcon fund, which collectively raised nearly $3 billion in capital before collapsing. (Reporting by Sarah N. Lynch; Editing by Susan Heavey)