New York Attorney General Andrew Cuomo issued a press release indicating he has reached a settlement worth more than $7 billion with Citigroup that requires the company to buy back auction-rate securities from about 40,000 customers in the U.S.
In order to garner the settlement, the AG had threatened to charge the Citi with fraudulent sales practices regarding auction-rate securities as well as the destruction of key documents.
One of the terms of the settlement requires Citigroup to buy back securities from retail customers, charities and small to mid-sized businesses by Nov. 5, 2008. In additoin, the banking giant will have to pay the State of New York $50 million in civil penalties with an additional $50 million to the North American Securities Administrators Association.
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