Citibank 2011 Annual Report Download - page 292

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Securities Actions: Citigroup and Related Parties have been named as
defendants in four putative class actions filed in the United States District
Court for the Southern District of New York. On August 19, 2008, these actions
were consolidated under the caption IN RE CITIGROUP INC. SECURITIES
LITIGATION. The consolidated amended complaint asserts claims arising
under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 on
behalf of a putative class of purchasers of Citigroup common stock from
January 1, 2004 through January 15, 2009. On November 9, 2010, the district
court issued an opinion and order dismissing all claims except those arising
out of Citigroup’s exposure to CDOs for the time period February 1, 2007
through April 18, 2008. Fact discovery is underway. Plaintiffs have not yet
quantified the putative class’s alleged damages. During the putative class
period, as narrowed by the district court, the price of Citigroup’s common
stock declined from $54.73 at the beginning of the period to $25.11 at the
end of the period. (These share prices represent Citi’s common stock prices
prior to its 1-for-10 reverse stock split, effective May 6, 2011. See “Earnings
Per Share” in Note 1 to the Consolidated Financial Statements.) Additional
information relating to this action is publicly available in court filings under
the consolidated lead docket number 07 Civ. 9901 (S.D.N.Y.) (Stein, J.).
Citigroup and Related Parties also have been named as defendants in
two putative class actions filed in New York state court, but since removed
to the United States District Court for the Southern District of New York,
alleging violations of Sections 11, 12 and 15 of the Securities Act of
1933 in connection with various offerings of Citigroup securities. On
December 10, 2008, these actions were consolidated under the caption IN
RE CITIGROUP INC. BOND LITIGATION. In the consolidated action, lead
plaintiffs assert claims on behalf of a putative class of purchasers of corporate
debt securities, preferred stock and interests in preferred stock issued by
Citigroup and related issuers over a two-year period from 2006 to 2008.
On July 12, 2010, the district court issued an opinion and order dismissing
plaintiffs’ claims under Section 12 of the Securities Act of 1933, but denying
defendants’ motion to dismiss certain claims under Section 11. Fact discovery
is underway. Plaintiffs have not yet quantified the putative class’s alleged
damages. Additional information relating to this action is publicly available
in court filings under the consolidated lead docket number 08 Civ. 9522
(S.D.N.Y.) (Stein, J.).
Citigroup and CGMI have been named as defendants in two putative
class actions filed in the United States District Court for the Southern District
of California, but since transferred by the Judicial Panel on Multidistrict
Litigation to the United States District Court for the Southern District of New
York. In the consolidated action, lead plaintiffs assert claims on behalf of
a putative class of participants in Citigroup’s Voluntary Financial Advisor
Capital Accumulation Plan from November 2006 through January 2009.
On June 7, 2011, the district court granted defendants’ motion to dismiss
the complaint and subsequently entered judgment. On November 14, 2011,
the district court granted in part plaintiffs’ motion to alter or amend
the judgment and granted plaintiffs leave to amend the complaint. On
November 23, 2011, plaintiffs filed an amended complaint alleging
violations of Section 12 of the Securities Act of 1933 and Section 10(b) of the
Securities Exchange Act of 1934. Defendants filed a motion to dismiss certain
of plaintiffs’ claims on December 21, 2011. Additional information relating
to this action is publicly available in court filings under the docket number
09 Civ. 7359 (S.D.N.Y.) (Stein, J.).
Several institutional or high-net-worth investors that purchased debt and
equity securities issued by Citigroup and affiliated issuers also have filed
actions on their own behalf against Citigroup and Related Parties in federal
and state court. These actions assert claims similar to those asserted in the
IN RE CITIGROUP INC. SECURITIES LITIGATION and IN RE CITIGROUP
INC. BOND LITIGATION actions described above. Collectively, these investors
seek damages exceeding $1 billion. Additional information relating to
these individual actions is publicly available in court filings under the
docket numbers 09 Civ. 8755 (S.D.N.Y.) (Stein, J.), 10 Civ. 7202 (S.D.N.Y.)
(Stein, J.), 10 Civ. 9325 (S.D.N.Y.) (Stein, J.), 10 Civ. 9646 (S.D.N.Y.)
(Stein, J.), 11 Civ. 314 (S.D.N.Y.) (Stein, J.), 11 Civ. 4788 (S.D.N.Y.) (Stein,
J.), 11 Civ. 7138 (S.D.N.Y.) (Stein, J.), 11 Civ. 8291 (S.D.N.Y.) (Stein, J.),
and Case No. 110105028 (Pa. Commw. Ct.) (Sheppard, J.).
ERISA Actions: Beginning in November 2007, numerous putative class
actions were filed in the United States District Court for the Southern District
of New York by current or former Citigroup employees asserting claims under
ERISA against Citigroup and Related Parties alleged to have served as ERISA
plan fiduciaries. On August 31, 2009, the district court granted defendants’
motion to dismiss the consolidated class action complaint, captioned IN RE
CITIGROUP ERISA LITIGATION. Plaintiffs appealed the dismissal and, on
October 19, 2011, the United States Court of Appeals for the Second Circuit
affirmed the district court’s order dismissing the case. Additional information
relating to this action is publicly available in court filings under the docket
number 07 Civ. 9790 (S.D.N.Y.) (Stein, J.) and 09-3804 (2d Cir.).
Beginning on October 28, 2011, several putative class actions were filed
in the United States District Court for the Southern District of New York by
current or former Citigroup employees asserting claims under ERISA against
Citigroup and Related Parties alleged to have served as ERISA plan fiduciaries
from 2008 to 2009. Additional information relating to these actions is
publicly available in court filings under the docket numbers 11 Civ. 7672,
7943, 8982, 8990 and 8999 (S.D.N.Y.) (Koeltl, J.).
Derivative Actions and Related Proceedings: Numerous derivative
actions have been filed in federal and state courts against various current
and former officers and directors of Citigroup alleging mismanagement in
connection with mortgage-related issues, including Citigroup’s exposure
to subprime-related assets and servicing and foreclosure of residential
mortgages. Citigroup is named as a nominal defendant in these actions.
Certain of these actions have been dismissed either in their entirety or in
large part. Additional information relating to the actions still pending is
publicly available in court filings under the docket numbers 650417/09
(N.Y. Sup. Ct.) (Fried, J.), 11 Civ. 2693 (S.D.N.Y.) (Griesa, J.), and 3338-VCG
(Del. Ch.) (Glasscock, V.C.). In addition, a committee of Citigroup’s Board
of Directors is reviewing a shareholder demand that raises RMBS-related
issues and a shareholder demand that raises issues relating to Citigroup’s
structuring and sale of Class V.