Citigroup settles CDO charges for $285 million
The SEC has ordered Citigroup to pay $285 million to settle charges relating to a short position taken against its own CDO investors
Citigroup is to pay $285 million to settle charges brought by the US Securities and Exchange Commission (SEC).
The charges relate to a $1 billion collateralised debt obligation (CDO) that Citigroup's principal US broker-dealer subsidiary marketed to investors. Without investors' knowledge, Citigroup Global Markets had taken a short position against the CDO, meaning that when it failed investors lost almost all of their investment while Citigroup made $160 million in fees and trading profits.
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