NEW YORK ( TheStreet) -- Citigroup ( C) CFO John Gerspach said Monday the company has no involvement with the Goldman Sachs ( GS) fraud scandal. During a conference call to discuss Citigroup's better-than-expected first-quarter results, Gerspach, while not offering much detail, felt the need to address what surely would otherwise have been brought up by analysts in the question-and-answer session following his remarks. "Citigroup is not involved in the matter that the SEC announced on Friday," Gerspach said. "It has been widely reported that the SEC, among other regulators, is conducting an industry-wide investigation into a wide range of subprime-related issues. As we disclosed in our 10k, we are fully cooperating with these investigations and it would not be appropriate for us to comment further." In its annual filing for fiscal 2009, which was filed in late February, Citigroup said that, beginning in November 2007, it and related parties have been named as defendants in "numerous legal actions and other proceedings brought by Citigroup shareholders, investors, counterparties and others concerning Citigroup's activities relating to subprime mortgages, including Citigroup's exposure to collateralized debt obligations (CDOs), mortgage-backed securities (MBS), and structured investment vehicles (SIVs), Citigroup's underwriting activity for subprime mortgage lenders, and Citigroup's more general involvement in subprime- and credit-related activities." Friday's markets were rocked after the Securities and Exchange Commissionfiled civil charges against Goldman Sachs alleging that the investment firm had committed fraud related to certain collateralized debt obligations with subprime mortgages underlying the securities. The lawsuit sidelined the recent rally in the financial sector because of the possible reverberations for other firms. In light of a published report that Goldman had received a Wells notice -- essentially a precursor to a future SEC enforcement action -- eight months ago, Citigroup's Gerspach was asked by an analyst if the company was operating under any Wells notices, and he declined to comment. Citigroup's stock was rising 3% to $4.70 in the afternoon, on huge trading volume of more than 1.1 billion shares. Earlier in the session, the shares rose as high as $4.93, once getting within shouting distance of $5.
The rally came despite an attempt by Citigroup CEO Vikram Pandit tamp down expectations with a cautious comment about the company's future performance. Indeed, the optimism following the report was such that prominent Citi shareholder Prince Alaweed was moved to issue a press release congratulating Pandit. "Citigroup has demonstrated its ability to overcome the recent economic obstacles," the statement reads. "I commend Citigroup's performance and the management of Citigroup under the leadership of Vikaram Pandit who has my firm backing." --Written by Laurie Kulikowski in New York.