MANHATTAN (CN) - Citigroup Global Markets and UBS Securities will release nearly $30 billion to tens of thousands of customers who invested in auction rate securities before the markets froze, the SEC said today. The settlements will free up $22.7 billion to UBS customers and $7 billion to Citi customers.
The settlements must be approved by the Federal Court. The SEC sued the financial giants alleging that they pushed the ARS to customers though they knew the market was collapsing. The auction rate securities collapsed in February, freezing billions of dollars of investments that were sold as liquid, virtually the same as cash.
The SEC said they are the largest settlements in the agency's history.
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