City National Corp. is reportedly the subject of an investigation by the Treasury Department, which gave the Beverly Hills company $400 million of taxpayer funds last year.

The Los Angeles Times reported Friday that the Treasury inspector general's office asked for details about how companies were deemed "eligible for participation" in the capital investment portion of the Treasury's $700 billion financial bailout program, and that City National was the target of the investigation.

The case "is not based on any suspected wrongdoing by City National," the paper said. "Rather, investigators see the review as a case study into how the Treasury Department is implementing its controversial program to infuse $250 billion into the nation's banking system." Neither City National nor the Treasury responded to interview requests Friday.

City National's shares were down more than 6% Friday morning, but recovered to close down 1.9%. 

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