Citigroup, as well as UBS and Merrill Lynch, is under investigation for mis-selling auction rate securities - and has now been accused of destroying evidence. (FT, via Naked Capitalism)

...Citi “repeatedly and persistently committed fraud” by misrepresenting auction rate securities as safe and cash-equivalent investments, said David Markowitz, chief of the office’s Investor Protection Bureau, in a letter sent to the bank on Friday.

After receiving a subpoena in mid-April for records under New York’s powerful Martin Act, Citi had “destroyed” recordings of related telephone conversations and failed to notify authorities – even though it learnt in mid-June that tapes had been destroyed, the letter claimed...