| NEW YORK
NEW YORK Feb 22 At the same time that Citigroup
Inc was unsuccessfully trying to convince an arbitrator
that the brokerage it owned with Morgan Stanley was worth
as much as $23 billion, the U.S. Securities and Exchange
Commission in August was asking Citigroup to document the
valuation it had placed on the asset.
The request was made public on Friday when the agency posted
written responses from Citigroup to questions from SEC staff
about the bank's financial disclosures.
The SEC request was made in an Aug. 22 letter, six days
before the two companies announced they were extending the
deadline to set the price that Morgan Stanley would pay for an
additional 14 percent of the brokerage, of which Morgan Stanley
already owned 51 percent.
At the time, the companies asked an arbitrator to set the
price because they could not agree on the brokerage's worth.
Citigroup's valuation proved to be more than one-and-half
times too high when the deal terms were finally stuck on Sept.
11, and the company announced a $4.7 billion charge to earnings
to write down the value on its balance sheet of its 49 percent
After announcing the charge, Citigroup told the SEC it was
submitting the requested valuation information in a separate
letter, which was not released on Friday.
A Citigroup spokesman declined to comment on the
correspondence with the SEC.