Citigroup Inc.'s sale of auction-rate securities is being formally investigated by the Securities and Exchange Commission after the market froze in February, leaving investors stuck with bonds they couldn't sell.

Citigroup and other firms that sold the securities have received subpoenas and information requests from state, federal and industry regulators, the bank said today in an SEC filing.

States include Massachusetts, New York and Texas, it said.

Auction-rate securities are typically bonds whose interest rates are reset by periodic bidding, usually every seven, 28 or
35 days. Brokers abandoned their role as buyers of last resort in mid-February, allowing the $330 billion market to collapse.

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