No menu items!

COSTA RICA'S LEADING ENGLISH LANGUAGE NEWSPAPER

HomeTopicsBusinessCitigroup pays $180 million to settle hedge fund fraud case

Citigroup pays $180 million to settle hedge fund fraud case

NEW YORK – U.S. securities regulators ordered two Citigroup affiliates Monday to pay $180 million to settle charges that they defrauded investors by falsely claiming a pair of hedge funds were low-risk.

Citigroup collected nearly $3 billion from 4,000 investors by claiming the ASTA/MAT fund and the Falcon fund were low-risk investments akin to investing in government bonds, the U.S. Securities and Exchange Commission said.

In 2008, both funds collapsed during the financial crisis.

“The funds were not bond substitutes, and an investment in the funds carried significantly greater risk than a bond investment,” the SEC said.

Both funds used “significant amounts of leverage” and were classified in an internal Citigroup rating system as having “significant risk to principal.”

“That rating, however, was not shared with the majority of investors and financial advisors,” the SEC said.

The SEC criticized Citigroup for poorly overseeing fund management staff to ensure communications were “accurate and not misleading.”

The order also faulted fund employees for dishonest statements about the funds’ financial condition when they came under strain in 2007.

“Advisers at these Citigroup affiliates were supposed to be looking out for investors’ best interests, but falsely assured them they were making safe investments even when the funds were on the brink of disaster,” said Andrew Ceresney, director for the SEC’s enforcement division.

Citigroup said through a spokesman that the bank is “pleased to have resolved this matter.”

Trending Now

Costa Rica’s Rincón de la Vieja Volcano Experiences Moderate Eruption

Guanacaste residents woke up to activity from Rincón de la Vieja volcano yesterday morning. The volcano produced a moderate phreatic eruption at 6:08 a.m....

Paris Louvre Robbery Targets Apollo Gallery Crown Jewels

Robbers wielding power tools scaled a furniture hoist outside the Louvre to make off with priceless jewelry from the world-renowned museum on Sunday, taking...

How to Grow Broccoli Successfully in Costa Rica’s Highlands

In Costa Rica's cooler highland regions, home gardeners harvest fresh broccoli that brings a distinct flavor to everyday meals. This vegetable packs vitamins A,...

Costa Rica Sport Fishing Industry Pushes 2026 Presidential Candidates

Leaders from Costa Rica’s tourism and sport fishing industry gathered last week to push for stronger marine policies, pressing presidential hopefuls to commit to...

Bolivia Elects Center-Right Leader Amid Crisis

Bolivians on Sunday elected a pro-business center-right senator as their new president, ending two decades of socialist rule that have left the South American...

Tourist Numbers Dropped in Costa Rica During 2025’s First Seven Months

Costa Rica's tourism took a hit in the first seven months of 2025, with visitor numbers dropping compared to the previous year. By the...
spot_img
Costa Rica Coffee Maker Chorreador
Costa Rica Coffee Maker Chorreador
Costa Rica Travel Insurance
Costa Rica Rocking Chait
Costa Rica Travel

Latest News from Costa Rica