NY attorney general settles for $7B with Citigroup

August 7, 2008 8:59:15 AM PDT
New York Attorney General Andrew Cuomo says he's 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 nationwide. Cuomo had threatened to charge the company with fraudulent sales of auction-rate securities and with the destruction of key documents.

The settlement announced Thursday requires Citigroup to buy back securities from retail customers, charities and small to mid-sized businesses by Nov. 5.

Citigroup will also have to pay New York state a $50 million civil penalty, and a separate $50 million civil penalty to the North American Securities Administrators Association.

Citigroup did not immediately return a call for comment.