Wednesday, April 20, 2011

Citigroup (C) Board Sued by Investor Over Mortgage Practices

Saying years of "shoddy" mortgage and foreclosure practices by Citigroup (NYSE:C) resulted in severe damages to the firm, caused by the lack of oversight of the board, which has been sued by individual investor Michael Brautigam.

The lawsuit was filed in New York federal court Wednesday, seeking to recover the costs of poor oversight from the board of directors.

"They failed to implement and maintain adequate internal controls to manage the foreseeably immense financial fall-out from the inadequate residential mortgage loan underwriting standards," the complaint stated.

The lawsuit asserts that the current board, and four former directors, which includes former U.S. Treasury Secretary Robert Rubin, breached their fiduciary duty to shareholders by failing to oversee Citigroup in a effective manner.

The case is Michael Brautigam v Robert Rubin et al, U.S. District Court, Southern District of New York, No. 11-2693.

Citigroup was trading at $4.55, gaining $0.01, or 0.44 percent, as of 2:56 PM EDT.

No comments: