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NEW YORK — (Mealey’s) A federal judge in New York on August 20 granted final approval of a securities class action settlement between investors and Citigroup Inc. and others, ruling that the terms of the settlement meet the statutory guidelines (In re Citigroup Inc. Bond Litigation, No. 08-9522, S.D. N.Y.).
U.S. Judge Sidney H. Stein of the Southern District of New York granted final approval of the settlement, ruling that the terms of the settlement and plan of allocation are fair, reasonable and adequate.
Under the terms of the settlement, Citigroup, one of its subsidiaries and eight of its trusts and 28 current and former executive officers and directors (collectively, Citigroup defendants) and close to 80 banks that acted as underwriters of the stock offerings at issue will pay shareholders $730 million to settle claims that they issued a series of false and misleading statements in the offering materials for the 48 stock offerings at issue in violation of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933.
A group of seven pension funds and an insurance company — all purchasers of Citigroup debt securities through offerings between May 2006 and August 2008 — sued the defendants in the District Court.
On July 12, 2010, Judge Stein granted in part and denied in part the defendants’ motions to dismiss, ruling that although the shareholders have standing to bring a majority of their claims, they lack standing to plead other claims.
The shareholders are represented by Steven B. Singer, Mark Lebovitch, Kurt Hunciker and John Rizio-Hamilton of Bernstein Litowitz Berger & Grossmann in New York; Ira M. Press and Peter S. Linden of Kirby McInerney in New York; Robert D. Klausner of Klausner & Kauffman in Plantation, Fla.; Brian F. Rice of Rice, Michaels & Walther in Minneapolis; David Kessler, Sharan Nimul and Benjamin Sweet of Barroway Topaz Kessler Meltzer & Check in Radnor, Pa.; and Marc I. Gross and Joshua B. Silverman of Pomerantz, Haudek Block Grossman & Gross in New York.
The underwriter defendants are represented by Jay B. Kasner and George A. Zimmerman of Skadden, Arps, Slate, Meagher & Flom in New York.
The Citigroup defendants are represented by Brad S. Karp, Richard A. Rosen, Susanna M. Buergel and Karen R. King of Paul, Weiss, Rifkind, Wharton & Garrison in New York.
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