ROUGH CUT (NO REPORTER NARRATION)<br/> <br />STORY: Citigroup has agreed to pay $7 billion to settle a U.S. investigation into shoddy mortgage-backed securities the bank sold in the run-up to the financial crisis, including the largest civil fraud penalty ever levied by the U.S. Justice Department.<br/> <br />The settlement is more than twice what many analysts had expected but less than the $12 billion the government sought in negotiations with Citi, the third largest U.S. bank.<br/> <br />The settlement, signed over the weekend, capped months of negotiations, during which the government threatened to sue the bank, sources said.<br/> <br />"The penalty is appropriate, given the strength of the evidence of the wrongdoing committed by Citi," U.S. Attorney General Eric Holder said in a statement on Monday.<br/> <br />"Despite the fact that Citigroup learned of serious and widespread defects among the increasingly risky loans they were securitizing, the bank and its employees concealed these defects," Holder add
