Friday, 27 March 2015
Last updated 2 hours 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."
Mar 9 2015 | 6:35am ET
As more investors look to diversify, many are beginning to use retirement funds to invest in alternative assets such as private equity and real estate. Kelly Rodriques, CEO & President of PENSCO Trust Company, explains how companies can connect with those looking to use their retirement accounts in a different way. Read more…
Mar 20 2015 | 12:45pm ET
StreetWise Partners, a non-profit organization that works with low-income individuals to help them overcome employment barriers, raised over $275,000 at the 2015 Raising the Ante Charity Poker Tournament and Casino Event last Wednesday evening at Capitale. Here are some photos from the event. Read more…