As it turns out, Citibank is currently under negotiations with the SEC as an investigation is under way regarding Citibank's disclosure of troubled mortgage assets. However, if the SEC imposes a fine, the concern is that since the government has used TARP funds to prop Citibank up, then they will be taking their own funds back in the form of a fine.
The WSJ reported:
Among issues being debated inside the SEC is whether, as a recipient of government-rescue funds, Citigroup should pay a large penalty in the case. There is concern at the SEC about the notion of financial firms in effect using taxpayer money to pay penalties, people close to the situation say. Citigroup received $45 billion from the government's Troubled Asset Relief Program ... "The question is: Is the money being round-tripped, going from one part of the government to another part?" said Oliver Ireland, a partner in the financial-services practice at the law firm Morrison & Foerster LLP. If the government is "trying to shore up the capital of an institution so it can function in the marketplace, you've got to take that into consideration" in determining the size of any fine or penalty, Mr. Ireland said.