Securities Arbitration Lawyers BlogSEC Announces Citigroup Affiliates to Pay $180 Million in Hedge Fund Fraud Settlement
Affiliates allegedly defrauded traditional bond investors
Following allegations and an investigation by the Securities and Exchange Commission (SEC), two Citigroup affiliates have agreed to pay nearly $180 million to settle charges that they defrauded investors in two hedge funds. The firms are accused of claiming the hedge funds in question were safe, low-risk and appropriate for traditional bond investors, when in fact, the funds were in dire condition.
According to the SEC press release, Citigroup Global Markets Inc. (CGMI) and Citigroup Alternative Investments LLC (CAI) neither admitted to nor denied the SEC’s charges, but agreed to bear all costs of distributing the $180 million in settlement funds to harmed investors.