Tuesday, 27 January 2015
Last updated 53 min ago
Apr 15 2011 | 1:23pm ET
Citigroup has lost another arbitration case over a series of municipal bond hedge funds it was forced to bail out during the financial crisis.
A Financial Industry Regulator Authority panel in Denver ordered Citi to pay three investors more than $54 million, including $17 million in compensatory damages. The investors, Gerald Hosier, his family office, Brush Creeek Capital, and Jerry Murdock, had accused the bank of misleading them about the risks of the MAT/ASTA hedge funds, which collapsed in 2008, costing investors some 80% of their money despite Citi's $1 billion infusion.
The panel's ruling is the 11th time in 13 tries that an investor in the MAT hedge funds has defeated Citi at arbitration, Securities Litigation and Consulting Group's Craig McCann told Reuters. But none of those previous losses has been as costly: The highest award granted until now was $6.4 million.
Citi said it was "disappointed" by the ruling and that it was considering its options.
Jan 23 2015 | 1:00pm ET
In our new section, FINtech Focus, we will profile one of these firms each week. While fintech is a broad category, we will be focusing on firms that specifically cater to the alternative investment industry. Read more…