WASHINGTON — Citigroup Inc. will buy back more than $7 billion in auction-rate securities and pay $100 million in fines as part of settlements with federal and state regulators, who said the bank marketed the investments as safe despite liquidity risks.

Citigroup will buy back the securities from tens of thousands of investors nationwide under separate accords announced yesterday with the Securities and Exchange Commission, Attorney General Cuomo, and other state regulators. The buybacks from nearly 40,000 individual investors, small businesses, and charities are not expected to cause significant losses for Citigroup; they must be completed by November.

Similar steps to buy back auction rate securities from customers are expected to be taken by other financial institutions. Bank of America Corp. revealed that it has received subpoenas and requests for information about its sale of the investments. Merrill Lynch & Co. said it will offer to buy back an estimated $12 billion in auction rate securities, though the company has already been actively reducing that amount.

Citi, the nation’s largest financial institution, said also will pay $50 million each in civil penalties to New York state and the North American Securities Administrators Association, which represents securities regulators in the 50 states and the District of Columbia.

The SEC also will consider levying a fine on Citigroup, the agency’s enforcement director, Linda Thomsen, said at a news conference.

New York-based Citigroup agreed to reimburse investors who sold their auction-rate securities at a loss after the market for them collapsed in mid-February. Also under the SEC accord, Citigroup agreed to make its best efforts to liquidate by the end of next year all of the roughly $12 billion of auction-rate securities it sold to retirement plans and other institutional investors. Mr. Cuomo said his office will monitor that effort for three months and then decide on a timeframe.

The $330 billion auction-rate securities market involved investors buying and selling instruments that resembled regular corporate debt, except the interest rates were reset at regular auctions — some as frequently as once a week. A number of companies invested in the securities because, thanks to the regular auctions, they could treat their holdings as liquid, almost like cash.

Major issuers included companies that financed student loans and municipal agencies like the Port Authority of New York and New Jersey. In February, when banks such as Citigroup ceased backstopping the auctions with supporting bids because of concerns about credit exposure, the bustling market collapsed. That left some issuers paying double-digit interest rates because of the terms under which they issued the securities.

“These were conservative investors; that’s why they bought these securities,” Mr. Cuomo said in a telephone interview. “These were not high-risk investors.”