The US bank joins Fifth Third Bancorp in declaring losses from the Falcon Strategies fund - which has lost approximately 75 per cent of its value.
Both firms invested in the fund through their company life insurance unit, with Wachovia writing down $315 million and Fifth Third $323 million as a result.
Moreover, a third bank is also thought to have taken a significant financial hit - although its name has yet to be disclosed.
Sources familiar with the situation informed the newspaper that all three financial firms are likely to ask Citi to repay some of the money they lost in the fund.
Individual investors have already been informed that they will be reimbursed from the fund.
Wachovia's disclosure of its investment in the fund comes days after it revised its total first quarter loss upwards to $708 million.