WASHINGTON - In the largest federal and state settlement of its kind, Citigroup Global Markets Inc. yesterday agreed to buy back, or help investors liquidate, a total of $19.5 billion of auction-rate securities during the next 17 months and pay $100 million of fines to the states, including $50 million to New York.

The "settlement in principle" stems from investigations by the Securities and Exchange Commission, the Financial Industry Regulatory Authority, the North American Securities Administrators Association, and the New York attorney general, as well as states including Texas, Massachusetts, and New Jersey, revolves around the largest firm in the $330 billion ARS market and could serve as a model for future ARS settlements.

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