Citigroup Inc has agreed to settle a class action suit on behalf of its investors to the amount of US$730 million. The claim stems from the allegation that the investors were mislead by the disclosures made by the company.
The affected investors were those purchasers of the debt and preferred stocks between 2006 and 2008. Allegations as to the misstatements and omissions made by the bank disclosures were admitted by Citigroup in its statement with its proposed settlement to investors. The investors had accused understatement of the bank's loss reserves on their high-risk residential mortgage loans and false statements as to risk assessments on supposedly high credit quality. The allegations were made through the law firm of Bernstein,Litowitz, Berger and Grossman who represented the pension funds and other affected investors in the case.
The statement though clarified that the settlement was not a move to end litigation. It said, "This settlement is another significant step toward resolving our exposure to claims arising from the financial crisis."
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