By Rachelle Younglai and Jonathan Stempel
WASHINGTON/NEW YORK (Reuters) - CITIGROUP (C.NY)Inc
In a court filing, Citigroup called the accord "fair, adequate, reasonable and appropriate."
The third-largest U.S. bank by assets is hoping to convince U.S. District Judge Ellen Segal Huvelle to approve the settlement with the U.S. Securities and Exchange Commission, four weeks after she refused to do so.
A published report quoted her at the time as saying she refused to be a "rubber stamp."
The SEC accused Citigroup of misleading investors by telling them from July to October 2007 that its exposure to subprime securities was only about $13 billion, only to reveal that November that the sum was more than $52 billion.
Soaring losses from risky debt led to a series of bailouts that left the government owning one-third of Citigroup, a stake it has been reducing. Citigroup shares, which traded above $50 in July 2007, closed Monday up 8 cents at $3.99.
In its filing, Citigroup said "the individuals involved in preparing the relevant disclosures acted in good faith," and that only in hindsight might it be "tempting" to question what they had thought at the time.
Upon realizing it misjudged the risk of its debt, Citigroup "promptly" made additional disclosures, including plans to take billions of dollars of additional write-downs, the filing said.
Citigroup also said settling avoids possible "public and costly litigation" with the SEC, one of its main regulators.
In a September 8 filing, the SEC also urged Huvelle to approve the settlement, which it called "fair, adequate, reasonable and in the public interest." It said it based the fine on how much Citigroup might have saved on bond issuances as a result of the lesser, earlier disclosures.
Citigroup agreed with the SEC that top officials, including then-Chief Executive Charles Prince and then-senior adviser Robert Rubin, were aware in the second half of 2007 that some higher-rated subprime mortgages were causing losses.
But the SEC said it decided to charge only former Citigroup Chief Financial Officer Gary Crittenden and former Citigroup investor relations chief Arthur Tildesley.
Crittenden and Tildesley agreed to pay $100,000 and $80,000 to settle respective administrative proceedings. Neither they nor Citigroup admitted wrongdoing in agreeing to settle.
Huvelle will hold a status conference September 24.
The case is SEC v. Citigroup Inc, U.S. District Court, District of Columbia, No. 10-01277.
(Reporting by Maria Aspan, Rachelle Younglai and Jonathan Stempel; Editing by Steve Orlofsky, Phil Berlowitz)
