Back to top

Analyst Blog

On Monday, the U.S. District Judge in Manhattan, Sidney H. Stein received papers for the approval of Citigroup Inc.’s (C - Analyst Report) $730 million settlement deal with investors pertaining to the purchase of the company’s stock. The settlement will be made to compensate investors, who were misleaded in the disclosures associated with the purchase of Citigroup debt and preferred stock during the period May 11, 2006 to Nov 28, 2008.

Investors filed a lawsuit against Citigroup in the federal court of Manhattan over the purchase of 48 offerings of preferred stock and bonds about 4 years ago. The complaint accused Citigroup of understating the loss reserves related to risky residential mortgage loans in the associated disclosures. The plaintiffs also claimed that Citigroup misrepresented and deceptively concealed the creditworthiness of risky assets by providing materially misleading statements.

Citigroup has refrained from accepting the accusations but agreed for the settlement to resolve the matter once and for all. Citigroup’s existing litigation reserves will be used for the payment under the proposed settlement.

Among other banking giants, Bank of America Corporation (BAC - Analyst Report), The Goldman Sachs Group, Inc. (GS - Analyst Report) and JPMorgan Chase & Co. (JPM - Analyst Report) have also come up with similar settlement deals of lawsuits during 2012.

With the resolution of the lawsuits, banks plan to move forward with business strategies after attempting to end issues related to the financial crisis. Moreover, pending lawsuits can further trigger financial hassles while ruining the company’s image. Therefore, it is in the interest of the banks to resolve such matters at the earliest. Also, the settlement of lawsuits ensured justice for the investors who were deprived of their hard-earned money.

Citigroup currently retains a Zacks Rank #3 (Hold).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
PLANAR SYST… PLNR 4.44 +5.21%
BITAUTO HOL… BITA 81.71 +5.12%
CTPARTNERS… CTP 16.66 +4.26%
CHINA BIOLO… CBPO 47.91 +3.30%
MALLINCKROD… MNK 72.94 +2.85%