New York, NY: Citigroup has agreed to pay $730 million to settle a securities class-action lawsuit filed by investors four years ago. The settlement is reportedly the second largest resulting from litigation over subprime mortgage-backed securities in 2006-2008.
The class action, filed by the Arkansas Teacher Retirement Systems and the Louisiana Sheriffs' Pension and Relief Fund, among others, alleges Citigroup misled investors in its bonds and preferred stock over its exposure to sub-prime mortgages between May 11, 2006 and November 28, 2008.
In a statement, Citigroup Inc, said it "denies the allegations and is entering into this settlement solely to eliminate the uncertainties, burden and expense of further protracted litigation".
This settlement follows an earlier $590 million payout ending a shareholder class action that alleged the bank had failed to disclose fully, the extent of its exposure to toxic mortgage products in the months preceding the 2008 financial crisis.
