New York - America’s banking giant Citigroup said on Monday that it will pay $730-million to settle a class-action suit by bond-holders related to the 2008 financial crisis.
The suit alleged Citigroup misled buyers of its bonds over its exposure to subprime mortgages and other high-risk securities ahead of and during the crisis, from May 2006 to November 2008.
The plaintiffs had argued that Citigroup misrepresented its exposure to mortgage-related assets, according to Bernstein Litowitz Berger & Grossman, the plaintiffs’ attorneys.
Citigroup also understated the loss reserves for its mortgage loans and “falsely stated” that assets held off its balance sheet were of high value, Bernstein Litowitz said.
In a statement, Citigroup denied the allegations, but said it was settling the case “solely to eliminate the uncertainties, burden and expense of further protracted litigation”.
Citigroup called the settlement “another significant step toward resolving our exposure to claims arising from the financial crisis”.
“We look forward to putting this matter behind us,” the bank said.
The plaintiffs in the case included the Arkansas Teacher Retirement Systems and the Louisiana Sheriffs' Pension and Relief Fund.
The settlement must be approved by a US District Court. - Sapa-AFP