Citi to buyback securities worth $7.3 bn

NEW YORK: Citigroup will buy back securities worth 7.3 billion dollars from investors as part of its settlement with American regulatory authorities following allegations of fraudulent sale of illiquid bonds against the banking giant.

The banking behemoth, headed by India-born Vikram Pandit, would buy back Auction Rate Securities (ARS), or illiquid bonds, worth 7.3 billion dollars before November 5, a statement by Citi said
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In a statement issued on Thursday, Citi said it would also pay 100 million dollars to the State of New York and other state regulatory agencies.

The decision to purchase back comes after allegations that Citi fraudulently sold ARS to investors. However, Citi said it "neither admits nor denies allegations of wrongdoing."

"The par value of the ARS currently eligible for purchase from individual investors, small institutions and charities totals approximately 7.3 billion dollars," the banking major said. Citi would purchase ARS from those who bought them before February 11.
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"Our most important focus continues to be on helping our clients. Since the beginning of the Auction Rate Securities (ARS) crisis, Citi has worked diligently with issuers, investors, and regulatory authorities to obtain liquidity for holders of illiquid ARS," Citi said.