Citigroup sued for fraud over $1 billion of CDOs
NEW YORK (Reuters) - Citigroup Inc (C.N) was sued for fraud by Loreley Financing over nearly $1 billion worth of collateralized debt obligations purchased in 2006 and 2007.
Citigroup is accused of defrauding Loreley into purchasing "fraudulent investments that are now worthless," Loreley said in a complaint filed Tuesday in New York State Supreme Court in Manhattan.
Citi used the CDOs to offload the risks of toxic mortgage-backed securities on its books and to help preferred clients "short" the housing market, the lawsuit claims.
Danielle Romero-Apsilos, a spokeswoman for Citigroup, said in an email, "We believe the suit is without merit."
Loreley Financing is a group of special-purpose entities formed to invest in CD0s. The entities are organized under the laws of Jersey in the Channel Islands.
The entities, whose claims include fraud and unjust enrichment, are seeking at least $965 million paid for the notes and buybacks.
The case is Loreley Financing v. Citigroup Global Markets, 650212/2012, New York State Supreme Court.
- Tweet this
- Share this
- Digg this
- Missing Malaysian jet may have disintegrated in mid-air - source |
- Malaysian plane presumed crashed; questions over false IDs |
- CORRECTED-UPDATE 4-Malaysia Airlines plane crashes in South China Sea with 239 people aboard - report
- WRAPUP 8-Missing Malaysian jet may have disintegrated in mid-air - source
- Merkel raps Putin as Russian forces tighten grip on Crimea |