Robbins Geller Rudman & Dowd LLP Files Class Action Suit Against Citigroup Inc.
Robbins Geller Rudman & Dowd LLP (https://www.rgrdlaw.com/cases-citigroup-class-action-lawsuit.html) today announced that it filed a class action on behalf of an institutional investor seeking to represent purchasers of Citigroup (NYSE:C) common stock between January 15, 2016 and October 12, 2020 (the “Class Period”). This action was filed in the Southern District of New York and is captioned City of Sterling Heights General Employees’ Retirement System v. Citigroup Inc., No. 20-cv-9573.
The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Citigroup common stock during the Class Period to seek appointment as lead plaintiff in the Citigroup class action lawsuit. A lead plaintiff is generally the movant with the greatest financial interest in the relief sought by the putative class who is also typical and adequate of the putative class. A lead plaintiff acts on behalf of all other class members in directing the Citigroup class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the Citigroup class action lawsuit. An investor’s ability to share in any potential future recovery of the Citigroup class action lawsuit is not dependent upon serving as lead plaintiff. If you wish to serve as lead plaintiff in the Citigroup class action lawsuit, you must move the Court no later than 60 days from October 30, 2020. If you wish to discuss the Citigroup class action lawsuit or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, Brian E. Cochran of Robbins Geller, at 800/449-4900 or 619/231-1058 or via e-mail at firstname.lastname@example.org. You can view a copy of the complaint as filed at https://www.rgrdlaw.com/cases-citigroup-class-action-lawsuit.html.
The Citigroup class action lawsuit charges Citigroup and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Citigroup is a global diversified financial services holding company whose businesses provide consumers, corporations, governments and institutions with a broad range of financial products and services. Prior to the Class Period, Citigroup entered into a variety of consent orders with regulatory authorities that required Citigroup and its subsidiary bank to improve their compliance, risk management, internal controls and due diligence systems, policies and practices.
The complaint alleges that, contrary to defendants’ repeated reassurances that the Company was fulfilling its obligations under the consent orders and had revamped its risk management and internal control systems sufficiently to comply with these obligations, during the Class Period, Citigroup and its primary banking subsidiary had failed to: (i) implement and maintain an enterprise-wide risk management and compliance risk management program, internal controls, or a data governance program commensurate with Citigroup’s size, complexity, and risk profile; (ii) establish an effective risk governance framework; (iii) establish enterprise-wide risk management policies, standards, and frameworks necessary to adequately identify, measure, monitor, and control risks; (iv) establish effective front-line units, independent risk management, internal audit, and control functions; (v) develop and execute on a comprehensive plan to address data governance deficiencies, including data quality errors; and (vi) produce timely and accurate management and regulatory reporting. As a result of this information being withheld from the market, Citigroup stock traded at artificially inflated prices of more than $80 per share during the Class Period.
Then, through a series of disclosures, Citigroup’s failure to comply with the consent orders was revealed. On August 13, 2020, The Wall Street Journal reported that Citigroup had erroneously sent $900 million to a group of lenders that refused to return the money. Citigroup blamed the unprecedented mistake on human error and a breakdown in the Company’s manual processes – processes that the Company claimed to have fixed several years before. On September 14, 2020, The Wall Street Journal reported that authorities were preparing to reprimand Citigroup for failing to meaningfully improve its risk management systems. On October 7, 2020, the Office of the Comptroller of the Currency (“OCC”) and the Federal Reserve announced the entry of yet another consent order and the imposition of a $400 million penalty on Citigroup and its subsidiary bank for, inter alia, violating numerous banking laws and regulations, breaching prior consent orders, failing to implement effective internal controls and compliance systems, and engaging in systematically “unsafe and unsound” business practices.
Finally, on October 13, 2020, Citigroup announced its financial results for the third quarter of 2020, including a 34% decline in net income from the prior-year period, driven in large part by the $400 million penalty levied by the OCC. During the earnings call to discuss the results, defendants belatedly admitted that the Company had not moved quickly enough to address risk management and internal control deficiencies and revealed that the required fixes would not be “quick” or “easy” and the ultimate costs to implement the required remedies could cost significantly more than $1 billion. Following this series of disclosures, the price of Citigroup stock fell to a low of just $43 per share by October 14, 2020 – nearly 50% below the stock’s Class Period high price.
The plaintiff is represented by Robbins Geller, which has extensive experience in prosecuting investor class actions including actions involving financial fraud.
Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities litigation. With 200 lawyers in 9 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For seven consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in the world in both amount recovered for shareholders and total number of class action settlements. Robbins Geller attorneys have helped shape the securities laws and have recovered tens of billions of dollars on behalf of aggrieved victims. Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide. Robbins Geller attorneys are consistently recognized by courts, professional organizations and the media as leading lawyers in the industry. Please visit http://www.rgrdlaw.com for more information.