Update on Citigroup Employee FA CAP Stock and Options Class Action Case
On July 24, 2009, Zamansky & Associates was appointed co-lead counsel for the Class of current and former Citigroup employees globally, and for those locally in California and Minnesota, who forfeited their FA CAP stock and options or lost all value in them when Citigroup stock collapsed in late 2008. The class action lawsuit alleges that Citigroup’s offering documents relating to the FA CAP stock and options incorporated the firm’s financial results and future filings which contained untrue statements of material facts and omissions that: (i) Citigroup’s assets, loans and mortgage-related securities were impaired to a much larger extent than disclosed; (ii) Citigroup failed to properly record losses for impaired assets; (iii) Citigroup’s internal controls were inadequate to prevent the firm from properly reporting the value of its assets; (iv) Citigroup was not as well capitalized as represented and would have to raise additional billions by selling equity to the U.S. government in order to prevent its collapse; and (v) Citigroup caused its structured investment vehicles to imprudently issue billions of dollars worth of commercial paper and short term notes based upon false and misleading statements.
Significantly, a federal judge on Monday, July 12, 2010, denied Citigroup’s motion to dismiss a related case brought by Citigroup bond holders who have similar allegations. In denying Citigroup’s bid to dismiss the case, Judge Sidney H. Stein ruled that bondholders can pursue their case.
To read Judge Stein’s decision, click here.