The Hindu Business Line : Citigroup, UBS buying back $30 b in securities

WASHINGTON: Citigroup Inc and UBS AG on Friday agreed to buy back a total of nearly $30 billion in risky auction-rate securities that regulators said the banks marketed to customers as safe.

The Securities and Exchange Commission formally approved the settlements with the two banking giants following preliminary deals that were reached in August. Securities regulators in Texas and New York also announced details of final agreements with the banks.

Tens of thousands of the banks' customers bought the auction-rate securities before the $330 billion market for them froze in mid-February, the SEC said in announcing the final accords.

The new settlements were the largest return of customer money in the agency's history and all the investors will be made whole, SEC Chairman Christopher Cox said in a statement. The SEC's “prompt action after the auction-rate securities market froze ... which led to last summer's settlements in principle, helped restore liquidity to tens of thousands of investors,'' Cox said.

Citigroup and Switzerland's UBS neither admitted nor denied wrongdoing under the settlements. New York-based Citigroup agreed to buy back about $7 billion in the securities from affected customers, while UBS's repurchase totaled $22.7 billion. The SEC s ettlements are subject to federal court approval. The two banks also agreed to refrain from future violations of securities laws. - PTI

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