Global financial major Citigroup has agreed to pay $285 million to settle charges levelled by the Securities and Exchange Commission that it misled investors in a billion dollar derivatives deal.

The settlement agreement comes even as the US regulatory body brought separate charges against an Indian-origin portfolio manager who was primarily responsible for the transaction.

The SEC has charged Citigroup’s principal US broker-dealer subsidiary with misleading investors about the $1 billion dollar derivatives deal tied to the US housing market.

Citigroup bet against investors as the housing market showed signs of distress, leaving investors with losses even as it made $160 million in fees and trading profits.

The agency brought separate charges against Credit Suisse’s asset management unit, which served as the collateral manager for the derivatives transaction, as well as against Mr Samir Bhatt, the Credit Suisse portfolio manager primarily responsible for the transaction.

The SEC instituted related administrative proceedings against Mr Bhatt, who has not admitted or denied the SEC’s findings.

He has consented to the issuance of an order directing him to cease from committing any future violations.

He has also been suspended from associating with any investment adviser for a period of six months.

The SEC separately charged Citigroup employee Mr Brian Stoker, who had structured the deal.

“The securities laws demand that investors receive more care and candour than Citigroup provided to these investors,” the Director of the SEC’s Division of Enforcement, Mr Robert Khuzami, said.

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