If you own Citigroup ( C) shares, you're a chump.

It's not your fault, mind you. You've been played by Citi. And no one is calling them on it -- the SEC and the NYSE are playing along, in fact.

You've been had.

Citigroup is playing fast and loose with its shares and stockholders get no say in the matter.

It's all spelled out in the bank's press release today stating that it plans to dilute the holdings of common stock holders by converting preferred shares into common shares, and then it will conduct a reverse stock split to reduce the total number of outstanding common shares.

Now here's the part of the press release that makes you a chump: "Shareholder approval to increase Citi`s authorized shares is not necessary."

Citi goes on to say that the NYSE granted an exception to shareholder voting requirements. The plans are on file with the SEC, and Citi's release suggests it doesn't anticipate any problems proceeding.

The plan to get the government and other owners of preferred shares to convert to common shares will first dilute the holdings of investors who currently own common shares. Don't like that? Too bad.

Then comes a reverse stock split that will convert some number of shares into a single share with the same relative value as the combined shares previously held. Of course that assumes the shares hold onto that value. Do you feel lucky?

It's not just common shareholders that are getting played here. Citi also is cleverly pushing its bailout repayment risk onto the government with these initiatives. If it all goes through, taxpayers will have to hope for a major rebound in the bank's share price in order to recoup the "investment" the U.S. Treasury made.

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