“When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing,” Chuck Prince – Citi.
It’s getting nasty at Citi.
An investor lawsuit contends that Citigroup Inc (NYSE:C - News) insiders, including senior counselor and former U.S. Treasury Secretary Robert Rubin, sold more than $150 million of their own shares at inflated prices while concealing the bank’s true financial health.
The shareholders contend that Rubin, former Chief Executive Charles Prince and other current and former executives engaged in “suspicious” stock sales that were “made at times calculated to maximize the personal benefits from undisclosed inside information.”
The lead plaintiff is a group of ex-employees and directors at Automated Trading Desk, an electronic trading firm sold to Citigroup for $680 million in 2007.
The group, represented by law firm Kirby McInerney LLP, contends that Citigroup shares they received as part of the buyout — valued at $52 each at the time — were artificially inflated because of misstatements and deception by the defendants.
“Defendants knew full well that Citigroup was exposed to increasingly risky assets and decreasingly valuable assets, primarily in the form of mortgage-related instruments, and dissembled, concealed and schemed to avoid having those facts fall into public hands,” according to the complaint.
