The SEC alleges that in response to intense investor interest, Citigroup made repeated misleading statements in earnings calls and public filings about the extent of its assets backed by subprime mortgages.
Between July and mid-October 2007, Citigroup represented that subprime exposure in its investment banking unit was $13 billion or less, when in fact it was more than $50 billion, according to the SEC.
Citigroup received one of the largest taxpayer bailouts, receiving $45 billion.
Goldman Sachs recently made a $550 million settlement with the SEC for fraud, a more serious offense than Citigroup faced. Citigroup is accused of negligence for not providing the subprime information and didn't intentionally mislead investors.
This posting was updated at 4:45 p.m.