Wednesday, April 13, 2011

Citigroup (C) Loses in Record Arbitration Award

In what was a somewhat shocking decision, a FINRA arbitration panel awarded two individual investors $54.1 million for losses suffered from investing in risky municipal bond funds via Citigroup (NYSE:C).

Not only was the record amount a shock, but the fact that there was a large ruling against the bank in the first place, as under normal conditions it happens very seldom.

Citigroup said in a statement, “We are disappointed with the decision, which we believe is not supported by the facts or law.” The giant bank said it's reviewing its options, which could include going to court, although arbitration decisions are difficult to successfully challenge.

During the financial crisis the bond funds lost 77 percent of their value.

Citigroup was trading at $4.525, falling $0.025, or 0.55 percent, as of 10:10 AM EDT.

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