Finally, some good news for Vikram Pandit and Citigroup (C).
The beleaguered CEO and other officers and directors of the bank won dismissal of a lawsuit claiming they manipulated the market for auction-rate securities before it collapsed in February 2008.
Bloomberg: U.S. District Judge Laura Taylor Swain in New York today dismissed the so-called derivative lawsuit on procedural grounds because the plaintiffs failed to ask the bank to bring the case itself. She gave the plaintiffs an opportunity to file a new complaint.
Plaintiffs led by the Louisiana Municipal Police Employees Retirement System claimed New York-based Citigroup was exposed to billions of dollars in settlements, fines and lost business after bankers rigged the market in auction-rate securities to hide a lack of liquidity. The defendants included board members Michael Armstrong and former Chairman Win Bischoff.
As the article notes, state regulators have already settled with Citigroup, UBS, Credit Suisse, Goldman Sachs and other underwriters that agreed to buy back billions of dollars in securities.
Citigroup agreed to buy back $7.3 billion of the debt from individual investors and pay $100 million in fines last August, also pledging to help 2,600 institutional customers unload $12 billion of securities.
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