Citigroup is nearing an agreement to buy back at least $5bn worth of auction-rate securities and pay a $100m fine. The landmark settlement with US regulators could be announced as early as Thursday and pave the way for similar deals by other banks. UBS was working on its own ARS settlement on Wednesday as Citi finalised its agreement with Andrew Cuomo, New York attorney-general, the SEC and 12 state securities regulators. Cuomo said last week he intended to sue Citi over its activities in the failed $330bn ARS market, accusing the bank of misrepresenting ARS as safe investments. The negotiations with UBS were less advanced, but observers believe the Citi settlement could be used as a basis for deals with the Swiss bank and others being investigated, such as Merrill Lynch and Wachovia.
