Citigroup Inc. agreed to pay $730 million to settle claims that it misled investors in four dozen bond and preferred-stock offerings over more than two years, in the second-largest settlement of investor litigation tied to the financial crisis, the Wall Street Journal reported today. The agreement, with plaintiffs including the Arkansas Teacher Retirement Systems and Louisiana Sheriffs' Pension and Relief Fund, is the latest to hit the nation's largest banks at a time of investor unease over the scope of their possible legal tabs. In the case settled yesterday, plaintiffs alleged that the New York-based company misled them about Citigroup's possible exposure to losses on securities backed by home loans, understated its loss reserves and said that some assets were of higher credit quality than they actually were. The pact covers 48 preferred-stock and bond deals between May 2006 and November 2008.
