Norway’s central bank has sued Citigroup for alleged misstatements over the company’s financial condition before the financial crisis, which it claims caused heavy losses to the Norwegian sovereign wealth fund.
In a lawsuit filed in New York, Norges Bank alleged that it lost $835m because Citigroup failed to fully reveal the financial risks it was facing – particularly from investments in subprime mortgages, reports FT.
The suit names Vikram Pandit, the group’s current chief executive, and Chuck Prince, his predecessor, among the defendants.
“Due to the defendants’ repeated material untrue statements and non-disclosure of material information to investors, plaintiff purchased Citi securities at inflated prices [between January 2007 and January 2009],” the lawsuit said.
“When the market slowly learned the truth of Citi’s financial condition, Citi came close to insolvency, and plaintiff lost a substantial amount of its investment.”
Citi denied the allegations. “We believe the suit has no merit and will defend ourselves vigorously,” said Danielle Romero-Apsilos, a Citigroup spokeswoman.
This should be quite a show. Norway will claim Citi is run by a bunch of crooks. Citi will claim they were simply clueless.
"Norway will claim Citi is run by a bunch of crooks. Citi will claim they were simply clueless."
ReplyDeleteThey are both correct.