Citigroup Agrees to Settle Bond Class Action for $730 Million
Citigroup, Inc. has agreed to resolve a class action lawsuit filed in 2008 by investors who purchased Citigroup bonds and preferred stock between May 2006 and November 2008. Last year, Citigroup settled a similar class action lawsuit brought by stock investors.
The class plaintiffs alleged that Citigroup made material misstatements and omissions concerning the loss reserves for its high-risk residential mortgages and the credit quality of its assets. According to Bloomberg, some of the plaintiffs in the case include the Louisiana Sheriff’s Pension and Relief Fund, Minneapolis Firefighters’ Relief Association and the City of Philadelphia Board of Pensions and Retirement.
During the subprime mortgage crisis, Citigroup almost collapsed. According to CNBC, a report by the Congressional Oversight Panel that oversees the TARP program reflects that Citigroup received a grand total of $476.2 billion in cash and guarantees from various federal bailout efforts. CNBC reports that Citigroup’s federal assistance included $25 billion from the TARP’s CPP program, $68.6 billion from the FDIC’s TLGP debt issuance program, and $88 billion from the Federal Reserve’s TAF liquidity program.
The proposed settlement of $730 million in the class litigation is subject to court approval.