Huffington Post: Citigroup Inc. (C.N) will have to pay its investors $54.1 million in compensation for losses suffered from its municipal securities funds between 2006 and 2008 according to the ruling of a New York arbitration panel. It is the biggest of such awards against the bank in recent times.
The speculators, Gerald Hosier, Brush Creek Capital and Jerry Murdock, claimed in June 2009 and then had wanted $48.2 million in compensation, plus incidentals relating to spectacular failures of three each of the municipal bond arbitrage funds and three ASTA Finance funds that they had purchased from Citigroup Global Markets brokers.
This week’s adverse ruling against Citigroup is the culmination of the problems that had started for it when just before the financial crisis had started it sold funds via MAT Finance LLC which short-borrowed at low rates and provided long term lending. However, when the financial crisis came into force back in 2007, things had gone sour for the speculators who lost around 80% of their money.
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