Citigroup Inc will pay U.S. regulators $75 million to settle charges that it failed to disclose $40 billion in subprime exposure to investors in 2007, the U.S. Securities and Exchange Commission said on Thursday.
The settlement is part of a larger regulatory probe into subprime mortgages. Earlier this month, Goldman Sachs Group Inc agreed to pay $550 million to settle civil fraud charges over how it marketed a subprime mortgage product.
Under Citigroup's settlement, the SEC charged the bank with material omission of disclosure requirements. Citigroup did not admit or deny the allegations under the settlement.
Citigroup failed to disclose its subprime exposure in the second and third quarters of 2007, according to the settlement.
By the end of that year, the bank had posted a huge write-down on subprime assets. Its bad bets on repackaged debt securities and consumer loans eventually forced it to take three separate government bailouts totaling $45 billion in 2008 and 2009.
The U.S. government has been slowly extricating itself from Citigroup but still owns an almost 18 percent stake in the bank.
Citigroup shares were up 1 cent at $4.10 in afternoon New York Stock Exchange trading.
(Reporting by Maria Aspan, Editing by Leslie Gevirtz and Maureen Bavdek)