Citigroup Securities Settlement
KM acted as lead counsel on behalf of a group of investors were appointed lead plaintiff in a securities class action against Citigroup Inc. (“Citigroup” or the “Company”) in the Southern District of New York. The action was brought on behalf of all persons who purchased or otherwise acquired the common stock of Citigroup between February 2007 and April 2008 inclusive (the “Class Period”). The Action was brought against the Company for alleged violations of the Securities Exchange Act of 1934. Defendants are Citigroup and certain of Citigroup’s officers and/or directors.
The lawsuit alleged that during the class period, the defendants issued materially false and misleading statements regarding the Company’s exposure to losses based upon the Company’s creation and/or sponsorship of numerous collateralized debt obligations.
When defendants began to disclose the truth regarding their exposure to VIE-related risks, the price of Citigroup common stock fell significantly. By the end of the Class Period, Citigroup common stock had declined by $25.68 (46%) per share from its Class period high of $56.41. This fall caused billions of dollars in shareholder losses and made Citigroup common stock the worst performing stock in the Dow Jones Industrial Average for 2007.
On February 20, 2009, KM filed an amended complaint against Citigroup, seeking to expand the class period initially outlined in the consolidated complaint filed December 1, 2008.
On November 9, 2010, Judge Sidney Stein dismissed in substantial part defendants’ motion to dismiss.
On August 1, 2013, the court granted final approval of a $590 million settlement of the claims.