Citigroup agreed to pay a $285 million settlement after federal regulators charged the company with misleading investors.

The Securities and Exchange Commission said Citigroup committed fraud when they invited investors to finance a $1 billion derivatives deal tied to the U.S. housing market, in which they bet against investors as the housing market showed signs of collapse.

This resulted with investors losing money while Citigroup acquiring $160 million in fees and trading profits, according to the SEC.

Bond insurer Ambac was one of the biggest losers in the deal when they sold Citigroup protection against losses on the investment, essentially allowing the financial company to bet against it, the AP reports. The $285 million settlement will be returned to investors.

Citigroup employee Brian Stoker was charged in a separate settlement for being primarily responsible for the transaction known as collateralized debt obligation. Both Citigroup and individuals who settled the charges neither admitted nor denied the charges.

“The securities laws demand that investors receive more care and candor than Citigroup provided to these CDO investors,” said Robert Khuzami, Director of the SEC’s Division of Enforcement. “Investors were not informed that Citgroup had decided to bet against them and had helped choose the assets that would determine who won or lost.”

Citigigroup said in a prepared statement: “We are pleased to put this matter behind us and are focused on contributing to the economic recovery, serving our clients and growing responsibly.”