Citi Settles on Auction Rate Securities Fraud Probe

They have settled with NY State AG Andrew Cuoma by agreeing to buy back $7 billion in auction rate securities and paying a $100 million fine, and to, "Use its 'best efforts' to liquidate" an additional $12 billion in ARS by the end of 2009.

This is about the fact that Citi, and most of the other banks involved in the auction rate securities, sold these as being just as liquid as a money market account, and the market then froze up, locking up $300+ billion.

I would expect increased pressure for other bankers to settle too.