Citigroup (NYSE:C) will pay $730 million to settle a lawsuit by investors who allege they were misled by the company's disclosures.
The nation's third-biggest bank by assets said late Monday the proposed pact would resolve a class action lawsuit filed on behalf of investors who bought $71 billion of debt securities and preferred stock in the company over roughly 30 months starting in May 2006.
The investors, including the Arkansas Teacher Retirement Systems and the Louisiana Sheriffs' Pension and Relief Fund, sued Citigroup in U.S. District Court in Manhattan, charging the company with misleading them regarding its exposure to billions of dollars in mortgage-related assets.
"This settlement is another significant step toward resolving our exposure to claims arising from the financial crisis, and we look forward to putting this matter behind us," Citigroup said in a statement posted on the company's website.
"It wasn't until November 2008, when the bank received substantial government assistance, that investors learned the full truth about Citigroup's financial condition," the law firm of Bernstein Litowitz, which represented the plaintiffs, said in a statement posted on the firm's website.
U.S. District Judge Sidney Stein must approve the settlement.
