(Reuters) – Citigroup Inc has been sending hedge fund firms letters informing them that it cannot sell investments in hedge funds and private-equity funds to clients after a deal with the Securities and Exchange Commission, the Wall Street Journal reported.
The bank this month reached a $285 million fraud settlement with the regulator over a complaint concerning a 2007 sale of mortgage-linked securities debt that caused more than $700 million of investor losses.
Citigroup said in the letter to hedge fund firms that it was working with the SEC to resolve the issue, the newspaper reported. (http://on.wsj.com/1p0VwSD)
However, the bank is allowed to sell private investments to large institutions, the Journal said.