Citigroup Inc. : Auction Rate Securities

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Citigroup Inc. : Auction Rate Securities Summary: According to a press release dated March 27, 2008, the Complaint alleges that Citigroup violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by deceiving investors about the investment characteristics of auction rate securities and the auction market in which these securities traded. Auction rate securities are either municipal or corporate debt securities or preferred stocks which pay interest at rates set at periodic "auctions." Auction rate securities generally have long-term maturities or no maturity dates.

The Complaint alleges that, pursuant to uniform sales materials and top-down management directives, Citigroup offered and sold auction rate securities to the public as highly liquid cash-management vehicles and as suitable alternatives to money market mutual funds. According to the Complaint, holders of auction rate securities sold by Citigroup and other broker-dealers have been unable to liquidate their positions in these securities following the decision on February 13, 2008 of all major broker-dealers including Citigroup to "withdraw their support" for the periodic auctions at which the interest rates paid on auction rates securities are set.

The Complaint alleges that Citigroup failed to disclose the following material facts about the auction rate securities it sold to the class: (1) the auction rate securities were not cash alternatives, like money market funds, but were instead, complex, long-term financial instruments with 30 year maturity dates, or longer; (2) the auction rate securities were only liquid at the time of sale because Citigroup and other broker-dealers were artificially supporting and manipulating the auction rate market to maintain the appearance of liquidity and stability; (3) Citigroup and other broker-dealers routinely intervened in auctions for their own benefit, to set rates and prevent all-hold auctions and failed auctions; and (4) Citigroup continued to market auction rate securities as liquid investments after it had determined that it and other broker dealers were likely to withdraw their support for the periodic auctions and that a "freeze" of the market for auction rate securities would result.

A press release dated August 26, 2008 announced that Zwerling, Schachter & Zwerling, LLP ("Zwerling Schachter") filed a Consolidated Amended Complaint (the "Complaint") in In re Citigroup Auction Rate Securities Litigation, Master File No. 08 Civ. 3095 (LTS)(FM). The Complaint is brought on behalf of investors who purchased auction rate securities underwritten and/or sold in auctions managed by defendants Citigroup Inc. (NYSE: C), Citigroup Global Markets, Inc. and Smith Barney ("Citigroup ARS"). The Complaint alleges that from August 1, 2007 through February 11, 2008 (the "Class Period") defendants manipulated the market for Citigroup ARS by fostering the illusion that a valid market existed where buyers and sellers came together, with supply and demand in balance, allowing for the successful completion of auctions of Citigroup ARS. In fact, no such balance existed.

On September 11, 2009, an Opinion and Order in regards to the Defendants' motion to dismiss the Complaint was granted, without prejudice to Plaintiffs ability to file an amended complaint. Any amended complaint must be filed and served by October 1, 2009.

On June 12, 2009, this case was associated with consolidated MDL case: 1:09-md-02043.

On October 15, 2009, a Second Consolidated Amended Complaint was filed in this action. The defendants responded by filing a motion to dismiss the Second Consolidated Amended Complaint.

On November 02, 2009, an order by one of the plaintiffs (Ocwen Financial) was granted voluntarily dismissing the claims against the defendants with prejudice. However, the claims of two other plaintiffs were not dismissed.

According to a stipulation and order entered by the Court dated February 09, 2010, pursuant to the terms of a settlement agreement between K-V Pharmaceutical Company and Citigroup Global Markets Inc., the Complaint and all of K-V's claims in the above-captioned action against CGMI are voluntarily dismissed with prejudice and without costs or attorneys' fees to either of the parties.

On March 08, 2010, a notice of voluntary dismissal that pursuant to Federal Rule of Civil Procedure 41(a)(I)(A)(i), the plaintiffs voluntarily dismissed the action with prejudice.

On June 17, 2010, the Plaintiffs filed their Third Consolidated Amended Complaint against the defendants.

On September 29, 2010, the Plaintiffs' Fourth Consolidated Amended Complaint was filed with the Court against the Defendants. The defendants responded by filing a motion to dismiss the Fourth Consolidated Amended Complaint. On March 1, 2011, the judge granted the defendants' motion to dismiss and five consolidated cases were closed. Judgment was entered the next day. On March 30, 2011, the plaintiffs filed Notice of Appeal.

INDUSTRY CLASSIFICATION:
SIC Code: 6021
Sector: Financial
Industry: Money Center Banks

COMPANY/ISSUER NAME:	Citigroup Inc.
COMPANY/ISSUER TICKER:	C
COMPANY WEBSITE:	http://www.citigroup.com

FIRST IDENTIFIED COMPLAINT IN THE DATABASE

LHB Insurance Brokerage Inc., et al. v. Citigroup, Inc., et al.

COURT: S.D. New York	DOCKET NUMBER: 08-CV-03095
JUDGE NAME: Hon. Colleen McMahon
DATE FILED: 03/26/2008	SOURCE: Notice of Filing
CLASS PERIOD START: 03/26/2003	CLASS PERIOD END: 02/13/2008
TYPE OF COMPLAINT: Complaint (Unamended and Unconsolidated)
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Levi & Korsinsky, LLP (former) 39 Broadway, Suite 1440, New York, NY, 10006 (voice) 212.363.7500, (fax) 212.363.7171, _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 1

DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT
Class Action Complaint for Violations of Federal Securities Laws - Jury Trial Demanded
Type: Complaint		Date on the document: 03/26/2008
Order Consolidating Cases Appointing Lead Plaintiff And Approving Selection Of Lead Plaintiff's Counsel
Type: Order Appointing LP/LC		Date on the document: 06/25/2008

REFERENCE COMPLAINT

In Re: Citigroup Auction Rate Securities Litigation

COURT: S.D. New York	DOCKET NUMBER: 08-CV-03095
JUDGE NAME: Hon. Laura Taylor Swain
DATE FILED: 10/19/2010	SOURCE: Docket
CLASS PERIOD START: 08/01/2007	CLASS PERIOD END: 02/11/2008
TYPE OF COMPLAINT: Fourth Amended and Consolidated
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Zwerling Schachter & Zwerling LLP 845 Third Avenue, New York, NY, 10022 (voice) 212-223-3900, (fax) 212-371-5969, inquiry@zsz.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 1

DOCUMENTS FOR THE REFERENCE COMPLAINT
Lead Plaintiff's Consolidated Amended Complaint
Type: Complaint		Date on the document: 08/25/2008
Notice Of Motion To Dismiss
Type: Notice		Date on the document: 10/24/2008
Opinion and Order
Type: Settlement		Date on the document: 09/11/2009
Plaintiff's Second Consolidated Amended Complaint
Type: Complaint		Date on the document: 10/15/2009
Notice Of Voluntary Dismissal Of Plaintiff Ocwen Financial Corporation
Type: Notice		Date on the document: 11/02/2009
Stipulation And Order Of Dismissal
Type: Order		Date on the document: 02/09/2010
Plaintiffs' Third Consolidated Amended Complaint
Type: Complaint		Date on the document: 06/17/2010
Plaintiffs' Fourth Consolidated Amended Complaint
Type: Complaint		Date on the document: 09/29/2010
Order Of Discontinuance
Type: Order		Date on the document: 10/19/2010
Memorandum Opinion and Order
Type: Order		Date on the document: 03/01/2011
Judgment
Type: Other		Date on the document: 03/02/2011
Notice Of Appeal
Type: Notice of Appeal		Date on the document: 03/30/2011
Stipulation And Order Of Dismissal
Type: Order		Date on the document: 06/30/2011
U.S. District Court Civil Docket
Type: Docket		Date on the document: 06/30/2011

OTHER DOCUMENTS
Class Action Complaint for Violation of Federal Securities Laws - Jury Trial Demanded
Case Name and/or Number: Lisa Swanson, et al. v. Citigroup, Inc., et al.
Type: Complaint		Date on the document: 03/27/2008
Notice Of Voluntary Dismissal
Case Name and/or Number: In Re: Citigroup Auction Rate Securities Litigation
Type: Notice		Date on the document: 03/08/2010

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