Retirement Plan Member Sues Citigroup
Tuesday November 6, 11:27 am ET
Citigroup Sued by Retirement Plan Participant on Stock Losses; Class Action Sought
NEW YORK (AP) -- A participant in Citigroup Inc.'s retirement program has sued the company, alleging its stock was "an imprudent investment" for its retirement plans because of "serious mismanagement" and improper business practices at the company.
The lawsuit, filed Monday in federal court in Manhattan, alleges the financial services company and the administrators of its retirement program should have known that investment in Citigroup's stock was "unduly risky and imprudent" because of several risky business practices, including its marketing of subprime loans and its participation in certain off-balance-sheet structured investment vehicles.
At the end of 2006, the Citigroup 401(k) plan held $4.13 billion in Citigroup stock, or about 32 percent of its total assets, the lawsuit said.
"Based on publicly available information, it appears that defendants' breaches of fiduciary duties have caused the plans to lose well over $1.3 billion in retirement savings during the class period," the lawsuit said.
The lawsuit is seeking class-action status for participants in Citigroup's retirement plans from Jan. 1 to the present.
The complaint also names as a defendant Charles Prince, who resigned as chief executive on Sunday.
Citigroup has named Sir Win Bischoff, head of its European operations, as interim CEO and former Treasury Secretary Robert Rubin as chairman.
The company has said it will write off between $8 billion and $11 billion to reflect declines in the value of its subprime-mortgage-related securities since Sept. 30.
"We are currently reviewing the complaint, but at this time we believe it is without merit and plan to vigorously defend Citi's actions," said Mike Hanretta, a Citigroup spokesman, in a statement.
Shares of Citigroup fell 76 cents, or 2.1 percent, to $35.14 in late morning trading Tuesday. |
