Citigroup has agreed to pay almost $180 million to investors to settle allegations of making false representations on hedge funds that collapsed during the financial crisis.

The US Securities and Exchange Commission said Monday that the bank concealed the problems concerning the said hedge funds, while it was still taking in investments during the months before the nation was hit by the financial crisis.

This made investors lose billions of dollars. The announcement comes seven years after those hedge funds went down. These losses in the Citigroup Hedge Funds were overshadowed by the many other controversies happening in Wall Street in 2007 and 2008.

The Securities and Exchange Commission revealed that two of Citigroup's affiliates made "false and misleading" representations on the funds to some 4,000 investors, raising almost $3 billion in capital. Later on the hedge funds collapsed. According to SEC, the funds were claimed to be low risk and ultimately safe. Also, Citigroup neglected to reveal that the funds were under poor condition as they were plummeting down.

SECs Enforcement Division Director Andrew Ceresney said, "Advisers at these Citigroup affiliates were supposed to be looking out for investors' best interests, but falsely assured them they were making safe investments even when the funds were on the brink of disaster."

The two Citigroup affiliates that misrepresented the funds where Citigroup Global Markets Inc. and Citigroup Alternative Investments LLC. Citigroup's affiliates consented to SEC without admitting or denying the allegation, which is a standard practice when it comes to settlements with major banks. The highly leveraged funds were sold exclusively to Citigroup Private Bank or Smith Barney clients.

Citigroup indeed agreed to pay $180 million to the investors who have lost their money. But Citigroup never admitted any wrongdoing.