In one of the largest settlements of suits tied to the financial crisis, Citigroup Inc. agreed to pay $590 million over claims that it deceived investors by hiding the extent of its dealings in toxic subprime debt.

The pact, with investors who purchased Citigroup stock in parts of 2007 and 2008, represents the latest effort by Citigroup Chief Executive Vikram Pandit to put the pain from the financial crisis behind it.

Citigroup...