Citibank 2015 Annual Report Download - page 310

292
Following the jury verdict awarding $431 million in damages on Citigroup’s
counterclaim, Citigroup has taken steps to enforce that judgment in the
Italian courts. On August 29, 2014, the Court of Appeal of Bologna affirmed
the decision in the full amount of $431 million, to be paid in Parmalat
shares. Parmalat has appealed the judgment to the Italian Supreme Court.
Prosecutors in Parma and Milan, Italy, brought criminal proceedings
against certain current and former Citigroup employees (along with
numerous other investment banks and certain of their current and
former employees, as well as former Parmalat officers and accountants).
On April 18, 2011, the Milan criminal court acquitted the sole Citigroup
defendant of market-rigging charges. The Milan prosecutors appealed part of
that judgment and sought administrative remedies against Citigroup under
Italian Administrative Law 231. On February 5, 2014, the Milan Court of
Appeal restricted the remedy to an administrative fine of €500,000, which
was later upheld by the Italian Supreme Court.
Additionally, the Parmalat administrator filed a purported civil complaint
against Citigroup in the context of the Parma criminal proceedings. On
March 5, 2015, the Parma criminal court accepted plea bargain agreements
from each of the defendants (eight current and former Citigroup employees)
and closed the criminal proceedings that had been commenced by
prosecutors in Parma. As a result of the agreements entered into by the
individuals, the Parma criminal court was no longer able to hear the civil
complaint filed by the Parmalat administrator against Citigroup. On June 16,
2015, the Parmalat administrator refiled the claim in an Italian civil court
in Milan, this time claiming damages of €1.8 billion against Citigroup and
Related Parties and other financial institutions. A preliminary hearing in this
new Milan proceeding is scheduled for April 19, 2016.
Regulatory Review of Student Loan Servicing
Citibank is currently subject to regulatory investigation concerning
certain student loan servicing practices. Citibank is cooperating with
the investigation. Similar servicing practices have been the subject of
an enforcement action against at least one other institution. In light of
that action and the current regulatory focus on student loans, regulators
may order that Citibank remediate customers and/or impose penalties or
other relief.
Sovereign Securities Matters
Regulatory Actions: Government and regulatory agencies in the U.S. and
in other jurisdictions are conducting investigations or making inquiries
regarding Citigroup’s sales and trading activities in connection with
sovereign securities. Citigroup is fully cooperating with these investigations
and inquiries.
Antitrust and Other Litigation: Beginning in July 2015, CGMI,
along with numerous other U.S. Treasury primary dealer banks, have
been named as defendants in a number of substantially similar putative
class actions involving allegations that they colluded to manipulate U.S.
Treasury securities markets. The actions are based upon the defendants’
roles as registered primary dealers of U.S. Treasury securities and assert
claims of alleged collusion under the antitrust laws and manipulation
under the Commodity Exchange Act. These actions were filed in the United
States District Court for the Southern District of New York, the Northern
District of Illinois, the Southern District of Alabama and the District of the
Virgin Islands.
In December 2015, the cases were consolidated before Judge Paul G.
Gardephe in the United States District Court for the Southern District of New
York by the Judicial Panel on Multidistrict Litigation. Additional information
relating to these actions is publicly available in court filings under the docket
number: 15-MD-2673 (S.D.N.Y.) (Gardephe, J.).
Settlement Payments
Payments required in settlement agreements described above have been
made or are covered by existing litigation accruals.