Citigroup said on Monday that it had agreed to pay $730 million to settle a class-action lawsuit on behalf of investors who said they were misled by the company’s disclosures. þþInvestors who bought the bank’s debt and preferred stock from 2006 to 2008 contended in their suit that there were misstatements and omissions in the bank’s disclosures, Citigroup said in a statement announcing the proposed settlement. þþThe investors accused the bank of understating loss reserves for its high-risk residential mortgage loans and falsely stating that risky assets were of high credit quality, according to Bernstein Litowitz Berger & Grossmann, a law firm that represented pension funds and other investors in the case. þþThe bank denied the accusations and said it was entering into the settlement to end the litigation. It said the settlement would be covered by existing litigation reserves. “This settlement is another significant step toward resolving our exposure to claims arising from the financial crisis,” the bank said in its statement. þþThe class action was filed on behalf of investors who bought 48 offerings of preferred stock and bonds, the law firm said. The proposed settlement, which will be reviewed by Judge Sidney H. Stein in Federal District Court in Manhattan, comes after more than four years of litigation. þ
Source: NY Times
