NY Attorney General Andrew Cuomo says Citigroup to buy back more than $7 billion illiquid auction-rate securities by November 5.
* Agrees to pay $100 million in penalties in auction rate settlement
* Cuomo says Citigroup to buy back debt from retail customers, charities, and
small- to mid-sized businesses
* To reimburse investors who sold auction-rate securities at a discount after
the market failed
* Cuomo says Citigroup to expeditiously provide liquidity solutions to
institutional investors
* In auction rate settlement agrees to public arbitration process to resolve
The office accused Citigroup of wrongly telling customers that auction-rate debt was safe, liquid and the equivalent of cash.
Citigroup has said it was also responding to subpoenas from Massachusetts and Texas over the debt.
Citigroup was the largest underwriter of auction-rate debt in all but one year this decade, Thomson Financial data show.
Shares of Citigroup fell 20 cents to $19.50 in morning trading on the New York Stock Exchange.
(Reporting by Grant McCool; Additional reporting by Jonathan Stempel and Dan Wilchins in New York and Rachelle Younglai in Washington; editing by John Wallace)