* More than $141 million sought
* Citigroup says Barclays obligated to cover its losses
* Barclays has no immediate comment
May 7 Citigroup Inc has sued Barclays Plc
to recover more than $141 million for providing foreign
exchange services to a unit of Lehman Brothers Holdings Inc soon
after Lehman's bankruptcy.
The complaint filed late Monday in the U.S. District Court
in Manhattan related to Citigroup's role in the Continuous
Linked Settlement system, which was designed to ensure that
foreign exchange trades are completed.
Citigroup said it sought to stop settling trades for
Lehman's brokerage unit on Sept. 17, 2008, two days after Lehman
went bankrupt, because it was incurring large losses.
But Barclays was then in the process of buying Lehman's U.S.
broker-dealer business, and, according to the complaint, urged
Citigroup to keep providing the services. It also agreed to
indemnify it for losses between Sept. 17-19, 2008.
Citigroup said it incurred $580 million in losses over that
period, but has reduced the amount to $90.8 million. The $141
million it seeks includes this sum plus interest and legal fees,
which Citigroup said are covered by the indemnity.
"Barclays stood to gain enormous profits from LBI's
continued ability to settle its FX trades," Citigroup lawyers
said. "In clear breach of the parties' agreement, Barclays has
refused Citibank's repeated demands that it honor its
Barclays spokesman Brandon Ashcraft had no immediate
Lehman's bankruptcy remains the largest in U.S. history, and
was a major cause of the 2008 global financial crisis. During
the crisis, Citigroup obtained a series of federal bailouts,
which it has repaid.
The case is Citibank NA v. Barclays Bank Plc, U.S. District
Court, Southern District of New York, No. 13-03063.