Two Citigroup entities agreed to settle charges by the Securities and Exchange Commission that they defrauded investors in two now-defunct hedge funds when they said they were “safe,” “low risk” and “bond substitutes” for traditional bond investors, when in fact there were at significant risk of loss because of the funds’ investment strategy and leverage. The funds were principally marketed from 2002 through 2007. The two entities were Citigroup Alternative Investments LLC and Citigroup Global Markets Inc. The firms agreed to disgorge profits of almost US $140 million and pay pre-judgment interest of almost US $40 million to resolve this matter.