Tuesday, 29 July 2014
Last updated 9 min ago
Mar 11 2010 | 3:25pm ET
Hedge fund VCG Special Opportunities Master Fund has lost its bid to force a Citigroup broker-dealer division into arbitration over claims that the bank “suckered” the hedge fund into losing more than $18 million on credit-default swaps.
A federal appeals court denied VCG’s bid to overturn a lower court decision that held Citigroup Global Markets was not a party to VCG’s lawsuit. The hedge fund accuses another Citi unit, Citibank, of violating the CDS agreement, leaving VCG on the hook for $10 million when Citibank wrote down the assets in the CDS.
According to VCG, Citibank downplayed the risk involved in the derivatives, as well as charging “far in excess of what Citibank actually required.” VCG also sued Wachovia.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…