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Citigroup, Wachovia face hedge fund lawsuits: report

NEW YORK
Tue Mar 4, 2008 11:19am EST

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The Citigroup sign is seen outside the Citigroup Center in New York, October 1, 2007. Citigroup Inc and Wachovia Corp are facing separate lawsuits filed in a U.S. Federal court in New York by a small fund, the Wall Street Journal reported on Tuesday. REUTERS/Shannon Stapleton

NEW YORK (Reuters) - Citigroup Inc (C.N) and Wachovia Corp WB.N are facing separate lawsuits filed in a U.S. Federal court in New York by a small fund, the Wall Street Journal reported on Tuesday.

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The suit claims that the banks each improperly required the fund to pay out more money from insurance derivatives contracts known as credit default swaps amid a decline in the value of the mortgage-backed bonds, said the Journal.

Both suits were filed last month by VCG Special Opportunities Master Fund Ltd, a Florida hedge fund with $58 million in capital.

Citigroup and Wachovia were not immediately available for comment.

(Reporting by Yinka Adegoke; Editing by Quentin Bryar)



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