Citi in talks with SEC over its misleading the investors

Negotiations are being conducted between Citigroup Inc and the U.S. Securities and Exchange Commission (SEC) to settle an investigation into whether the company misled investors by improperly disclosing the amount of troubled mortgage assets it held as the markets started to fall in 2007 according to the sources familiar with the situation cited by the Wall Street Journal.

The paper says that an issue being debated inside the SEC is whether Citigroup, as a recipient of government-rescue funds, should pay a large penalty in the case. Besides, the regulatory authorities are also considering the possible launch of actions against individuals related to disclosure of mortgage assets.