Citigroup has announced it has agreed, subject to court approval, to settle a class action lawsuit brought on behalf of investors who purchased Citigroup debt and preferred stock during the period May 11, 2006, through November 28, 2008.
Under the terms of the proposed settlement, Citi would pay a total of $730m. Plaintiffs in the class action had contended, among other things, that they were misled by misstatements and omissions in the company's disclosures during this period. Citigroup denies the allegations and is entering into this settlement solely to eliminate the uncertainties, burden and expense of further protracted litigation. The amount to be paid under the proposed settlement is covered by Citi's existing litigation reserves.
The company released the following statement:
'This settlement is another significant step toward resolving our exposure to claims arising from the financial crisis, and we look forward to putting this matter behind us. 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.
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