Citi Fraud Suit Will Proceed
NEW YORK (
) -- A court has agreed to allow a class action lawsuit alleging fraud against
Citigroup
(C) - Get Report
and several high profile former executives to continue.
The suit alleges Citigroup that during 2007 Citigroup "experienced, recognized and concealed" a crisis involving complex debt instruments known as collateralized debt obligations, according to a press release sent out by plaintiffs' attorneys Wednesday.
Citigroup and executives including former CEO Chuck Prince, former CFO Gary Crittenden and former Chairman Robert Rubin was aware of substantial CDO exposure even while during initial public statements it gave investors the impression CDO exposure was minimal, the release states. Citigroup had $50 billion of CDO exposure, according to the release.
In allowing the case to proceed, the Court found "incongruity between word and deed," the release states.
Citigroup was the
third most prolific
underwriter of CDOs in 2006-2007, behind the combined
Bank of America
(BAC) - Get Report
Merrill Lynch and
JPMorgan Chase
(JPM) - Get Report
, according to
Thomson Reuters
.
--
Written by Dan Freed in New York
.
Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.
