By Karen Freifeld
NEW YORK, March 18 Citigroup Inc has
agreed to pay $730 million to settle a class action lawsuit on
behalf of investors who said they were misled by the company's
Purchasers of the bank's debt and preferred stock between
2006 and 2008 claimed there were misstatements and omissions in
the disclosures, Citigroup said in a statement announcing the
The investors accused the bank of bank understating loss
reserves for its high-risk residential mortgage loans and
falsely stating risky assets were of high credit quality,
according to Bernstein Litowitz Berger & Grossman, a law firm
that represented pension funds and other investors in the case.
The bank denied the allegations and said it was entering
into the settlement to end the litigation. It said the
settlement would be covered by existing litigation reserves.
"This settlement is another significant step toward
resolving our exposure to claims arising from the financial
crisis," the bank said in its statement.
The class action was filed on behalf of purchasers of 48
offerings of preferred stock and bonds, the law firm said.
The proposed settlement, which will be reviewed by U.S.
District Court Judge Sidney Stein in New York, comes after more
than four years of litigation.