NEW YORK , Aug. 7 (UPI) -- Citigroup Thursday agreed to help customers stuck with $19.5 billion in auction rate securities, New York State Attorney General Andrew Cuomo said.

Cuomo said Citigroup agreed to buy back about $7.5 billion of auction rate securities from about 40,000 individuals and smaller business customers, The Washington Post (NYSE:WPO) reported. The bank also will help larger customers sell about $12 billion in securities they could not unload when the market for the bonds collapsed in February.

Cuomo had threatened a lawsuit, alleging Citibank told investors the bonds were safe investments. "It turns out they were anything but," Cuomo said.

In the settlement, which involves regulators from several states and the federal Securities and Exchange Commission, Citigroup agreed to pay $100 million in penalties, the Post reported.

In July, Cuomo's filed suit against Swiss bank UBS, claiming the bank promoted the investment while its executives knew the market was in trouble.