SEC v. Citigroup Global Markets Inc.
Case No. 11-cv-07387-JSR (S.D.N.Y.)

On October 19, 2011, the Commission filed a complaint against Citigroup Global Markets Inc. ("Citigroup" or "Defendant"), the principal U.S. broker-dealer subsidiary of Citigroup Inc. The complaint alleged that, from late 2006 to November 2007, Citigroup misled investors about a $1 billion collateralized debt obligation ("CDO") called Class V Funding III ("Class V III"). At a time when the U.S. housing market was showing signs of distress, Citigroup structured and marketed Class V III and exercised significant influence over the selection of $500 million of the assets included in the CDO. Citigroup then took a proprietary short position with respect to those $500 million of assets. That short position would provide profits to Citigroup in the event of a downturn in the United States housing market and gave Citigroup economic interests in the Class V III transaction that were adverse to the interests of investors. Citigroup did not disclose to investors the role that it played in the asset selection process or the short position that it took with respect to the assets that it helped select. See Complaint.

The Defendant was ordered to pay a total of $285,000,000.00 in disgorgement, prejudgment interest and penalties. The Clerk was ordered to deposit the funds into an interest bearing account with the Court Registry Investment System (collectively, the "Fund"), pending further order of the Court. See Defendant's Final Judgment.

The Defendant has paid a total of $285,000,000.00 into the Fund for the distribution to harmed investors.

On December 9, 2014, the Court appointed Damasco & Associates LLP as the Tax Administrator to fulfill the tax obligations of the Fund.

For more information, please contact the Commission:

Office of Distributions