Citigroup Settles Class Action Lawsuit For $730 Million

Citigroup agreed to pay $730 million to settle a class-action lawsuit that claimed investors were misled by the bank's disclosed when they purchased its debt and preferred stock, according to the Associated Press. These investors' purchases were made from May 11, 2006 through November 28, 2008.

"This settlement is another significant step toward resolving our exposure to claims arising from the financial crisis, and we look forward putting this matter behind us," the New York company said in a statement. Citigroup, Inc. had long denied allegations and said it agreed to the settlement to rid itself from further expenses and uncertainties that come along with drawn out litigation.

Michael Corbat took over as Citgroup's CEO after Vikram Pandit resigned abruptly in October. His first move in December was to cut 11,000 jobs, close dozens of branches and reduce the company's consumer banking business in some countries

Citigroup announced a settlement with federal regulators related to its foreclosure in January. The bank "allegedly took part in industry-wide practices that caused people to be foreclosed on illegally. It took a fourth-quarter charge of $305 million to cover its agreement with the Office of the Comptroller of the Currency and the Federal Reserve," the AP reported.

After 2008-2009 financial crisis and huge losses in the value of its sub-prime mortgage assets, Citibank was "bailed out" by the U.S. government. About $306 billion was invested. Since that time, it is reported that Citibank has repaid its government loans in full, according to sources. In early 2009, Citigroup announced that it was splitting into two businesses, with Citicorp continuing with the traditional banking business while Citi Holdings incoporates non-core businesses such as brokerage and asset management.

Citibank has retail banking operations in more than 160 countries and territories around the world.

Tags

Citibank, Business, Class-Action Lawsuit, Bailout

© 2023 Lawyer Herald All rights reserved. Do not reproduce without permission.