Citigroup to pay €470m to settle shareholder lawsuit
Citigroup has agreed to pay $590 million (€470 million) to settle a shareholder lawsuit accusing the bank of failing to disclose fully its exposure to toxic mortgage products in the run-up to the financial crisis.
The settlement, which needs court approval, is one of the largest payouts of its type, and comes two years after Citibank settled related allegations from the Securities and Exchange Commission.
It provides a modicum of relief to some Citibank shareholders, which have seen the value of the company plunge by more than 90 per cent in the last five years, and shows Wall Street’s mammoth bill for crisis-related litigation continues to mount.
Citibank, the third-biggest US bank by assets, said it continued to deny the allegations, the amount was covered by litigation reserves and it was settling “solely to eliminate the uncertainties, burden and expense of further protracted litigation”. It also hailed “a significant step toward resolving our exposure to claims arising from the period of the financial crisis”. – Copyright The Financial Times Limited 2012