Citigroup To Settle Class Action Lawsuit For $730 Mln

(RTTNews.com) - Citigroup Inc. ( C ) said Monday that it has agreed to pay $730 million to settle a class action lawsuit brought on behalf of investors who purchased the company's debt and preferred stock during the period from 2006 to 2008. The proposed settlement is subject to court approval.

Plaintiffs in the class action had contended that they were misled by misstatements and omissions in Citigroup's disclosures during the period from May 11, 2006 through November 28, 2008.

However, Citigroup denied the allegations and said it is entering into the settlement solely to eliminate the uncertainties, burden and expense of further protracted litigation. The company added that the proposed settlement amount is covered by its existing litigation reserves.

In a statement, Citigroup said, "Citi is a fundamentally different company today than at the beginning of the financial crisis. We have overhauled risk management and reduced risk exposures, while shedding assets and businesses that are not core to our strategy. We are completely focused on our clients and generating consistent, high-quality earnings."

The proposed settlement will be reviewed by the Hon. Sidney Stein in the United States District Court for the Southern District of New York, where the class action is pending.

In August 2012, Citigroup agreed to pay a total of $590 million to settle a class action lawsuit on behalf of investors who purchased the company's common stock during the period February 26, 2007 through April 18, 2008.

C closed Monday's trading at $46.24, down $1.02 or 2.16 percent on a volume of 38.55 million shares.

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