Updated to include latest share price, response from Treasury Department.

NEW YORK ( TheStreet) -- The U.S. Treasury has officially lost its entire $2.33 billion TARP investment in CIT Group ( CIT), according to a company filing with the Securities and Exchange Commission after Monday's closing bell.

The Treasury made the investment in CIT in December 2008, but CIT then ran into trouble after the Federal Deposit Insurance Corp. refused to guarantee its debt, as the FDIC did for larger lenders, including General Electric ( GE) and large banks like Citigroup ( C), Bank of America ( BAC) and Wells Fargo ( WFC). CIT ended up filing for bankruptcy protection on Nov. 1 but was able to reorganize and return to a public listing on Dec. 10.

Contrary to what many assumed, the bankruptcy filing did not extinguish all hope for a taxpayer recovery. The Treasury and other preferred shareholders received complex securities called contingent value rights (CVRs) which could have been worth something if CIT Group's stock had reached the mid-50s ahead of Monday's session, according to the estimate of another investor who held CVRs.

CIT Group is the largest loss on record under the TARP, though AIG ( AIG) General Motors, GMAC, Fannie Mae ( FNM), Freddie Mac ( FRE), Chrysler and Citigroup each owe the Treasury at least $10 billion each, according to ProPublica.

Linus Wilson, a University of Louisiana professor who has kept a close critical watch on the bailout, just hopes the Treasury has learned its lesson on CIT, should the lender run into trouble again under its new boss, former NYSE Euronext ( NYX)and Merrill Lynch chief John Thain.

"Taxpayers have already been burned once propping up CIT Group. Hopefully, they will not be forced to do that by misguided Treasury officials again. One thing we learned from the first Chapter 11 filing of CIT Group was that its bankruptcy was a non-event for the markets," Wilson wrote via email.

A spokesperson for the Treasury declined comment for this article.

CIT shares rose 14 cents to $30.75 in recent trades. Based on Monday's close at $30.61, the stock was up nearly 11% so far in 2010.

-- Written by Dan Freed in New York.

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