Thursday, 2 October 2014
Last updated 47 min ago
Oct 11 2011 | 1:10pm ET
Citigroup is seeking to stop a nearly $400 million arbitration claim over its handling of a Saudi family's alternative investments in its tracks.
The bank has sued Abdullah and Ghazi Abbar, who filed a $383 million arbitration claim against its Citigroup Global Markets unit, accusing it of mismanaging their hedge fund and private equity investments, wiping them out. But Citi said the two have no recourse to the Financial Industry Regulatory Authority, because the units the Abbars did business with are not based in the U.S.
"We are confident this matter will be appropriately resolved when it is reviewed by legal authorities in the jurisdictions that the parties agreed when they executed their trades," a Citi spokeswoman said.
Citi claims the transactions in question took place in the Cayman Islands, Switzerland and the U.K. The Abbars counter that Citi structured the transactions that way to avoid U.S. legal and regulatory obligations, and that the Citi affiliates they did business with answered to FINRA-registered Citi executives in New York.
According to the Abbars, after a period of courtship that included Citi CEO Vikram Pandit, their family agreed to move their hedge fund and private equity investments to Citi, and to enter into a series of transactions with bank affiliates that eventually led to the loss of the family's entire fortune during the financial crisis.
"Due to a pattern of gross misconduct by CGMI and its employees and affiliates, from late 2005 to the present, the considerable family wealth which the Abbars entrusted to Citigroup has been virtually wiped out," the FINRA claim alleges.
"Citigroup took over management of the remaining positions in the hedge fund portfolio and put in place a program for redeeming the entire portfolio," the claim continues. "Citigroup will unjustly benefit in the amount of approximately $70 million from redemption of such investments after repayment of the loan and interest."
Sep 22 2014 | 4:15pm ET
"I tell people that everybody likes good news and so if you have good performance that’s wonderful,” explains Mike McKitish of Peddie School's endowment, “but it’s the people that want to talk about the bad news or where they drifted and how they came back and how they stayed to their discipline…” that he wants to hear from. Read more…
Sep 30 2014 | 9:29am ET
The crisp Autumnal days of October are upon us, and so are a few of the hedge fund industry’s favorite charitable events. If you have never been to Rocktoberfest, well, you are missing out. And for a quieter evening of sipping and socializing, stop by HFC’s Wine Soiree. Read more…
High frequency trading is not evil, it is not a conspiracy and it really is not new; it is the natural evolution of the professional trading community making markets, providing liquidity and hopefully...