Citigroup to pay $730 million to settle investor suit

[JURIST] Citigroup, Inc. [corporate website] agreed on Monday to pay out $730 million to settle a lawsuit brought by investors claiming the financial services corporation misled debt investors about its condition during the financial crisis. According to a statement [text] from Citigroup, the agreement will settle "a class action lawsuit brought on behalf of investors who purchased Citigroup debt and preferred stock during the period May 11, 2006, through November 28, 2008." Citigroup denied all allegations, instead citing the desire to "eliminate the uncertainties, burden and expense of further protracted litigation." The class action suit was brought [Bloomberg report] in the US District Court for the Southern District of New York [official website] in 2008 by a number of investment groups that purchased 48 issues of Citigroup's corporate bonds. In 2010 US District Judge Sidney Stein denied a motion [WP report] by Citigroup to dismiss the case. The deal is still subject to court approval.

Citigroup has faced numerous suits based on accusations the company misled investors during the financial crisis. Last year Citigroup agreed to pay out [Reuters report] $590 million to settle a case brought by stock investors who claimed they had been mislead, accusing Citigroup of hiding billions of dollars in toxic mortgage assets from 2007-2008. In 2011 a judge for the US District Court for the Southern District of New York blocked a proposed $285 million settlement between the US Security Exchange Commission (SEC) [official website] and Citigroup over the sale of toxic mortgage debt.

 

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