On August 29, 2006, a Joint Notice was filed to alert the court regarding Rule 23(e)(1)(A) and that parties have filed concurrently a stipulation of dismissal pursuant to Rule 41(a)(1) filed by plaintiff Elisabeth Sandler Rogg and defendant, Citigroup Global Markets Inc. On August 29, 2006, the Court entered the Stipulation and Order that the action is dismissed with prejudice.
On June 7, 2005, the Court entered the Order signed by U.S. District Judge Christina A. Snyder granting the granting plaintiffs Motion for Appointment of Elisabeth Sandler Rogg as Lead Plaintiff and approval of Suer and Wagner as Lead Counsel for the putative class in this action. On September 13, 2005, a First Amended Complaint was filed, and the defendants filed a motion to dismiss. On April 11, 2006, Judge Christina A. Snyder: Court granted in part and denied in part the defendants’ Motion to Dismiss, and plaintiffs were directed to file a second amended complaint. On May 5, 2006, the plaintiffs filed a Second Amended Complaint.
The class action was commenced charging Citigroup with violations of federal securities and California law as a direct result of enabling Paul Joseph Sheehan D/B/A Paul J. Sheehan & Associates, who maintained investment accounts at Citigroup, to engage in a fraudulent "trade allocation" or "cherry-picking" scheme whereby Sheehan improperly allocated profitable day trades of securities to his personal investment accounts maintained at Citigroup at the expense of his clients' personal investment accounts also maintained at Citigroup. The Complaint alleges that during the Class Period, Citigroup permitted Sheehan to initiate day trades at Citigroup through the use of a trade allocation account (the "Sheehan Allocation Account") and to provide allocation instructions electronically to Citigroup at the end of each trading day. As a direct result of allowing Sheehan to allocate trades in this manner, Sheehan knew which of the day trades had been profitable before transmitting allocation instructions to Citigroup, and he was able to allocate profitable trades to his personal investment accounts to the detriment of his clients.
The Complaint further alleges that throughout the Class Period, Citigroup made material misrepresentations in documents and statements issued to Sheehan's clients by omitting material facts concerning the following: (a) the commingling of client assets in the Sheehan Allocation Account; (b) the inherent conflict of interest in allowing Sheehan to dictate the allocation of day trades for his own benefit and for his clients' benefit at the end of each day when the outcome of each trade was known by Sheehan; (c) the risks created by the procedures utilized at Citigroup in allocating trades by Sheehan; and(d) the inequitable allocation of profits from day trades to Sheehan's personal accounts to the detriment of his clients.
The class action lawsuit was brought on behalf of former clients of Paul Joseph Sheehan D/B/A Paul J. Sheehan & Associates.