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Post by bot on Aug 17, 2015 12:38:13 GMT -5
SEC fines Citigroup affiliates $180 million for hedge fund fraud
The Securities and Exchange Commission announced on Monday that two Citigroup affiliates will pay nearly $180 million to settle charges they defrauded investors in two hedge funds that collapsed during the financial crisis. An SEC investigation found that the bank units made false and misleading representations to investors in the ASTA/MAT fund and the Falcon fund, which collectively raised nearly $3 billion in capital from approximately 4,000 investors before collapsing. The bank did not disclose the very real risks of the funds and did not disclose the precarious condition of the funds as they were collapsing, the SEC said. Bank executives continued to assure investors that the funds were low-risk and well-capitalized investments with adequate liquidity, the SEC added. The divisions did not admit or deny the findings but agreed to be censured and must cease and desist from committing future violations of these provisions. Citigroup already has received a waiver from "ineligible issuer" rules over the settlement.
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