Because it was the financial advisor to the now-bankrupt telecom company, Citigroup was sued in a class action led by the Public Employees Retirement System of Ohio and the State Teachers’ Retirement System of Ohio. The company has agreed to pay $75 million in a pre-tax settlement to reimburse investors in publicly traded securities of Global Crossing and Asia Global Crossing. The class covers people invested in the stock from February 1, 1999 to December 8, 2003.
Two-thirds of the settlement will go to former investors in underwritten public offerings of the stock and one-third will go towards other investors, according to Citigroup. The settlement is still subject to review by federal courts.
Citigroup denied any wrongdoing, instead asserting that it entered into the settlement to eliminate uncertainties and the burden of litigation.
Previous settlements have been reached with Global Crossing executives and its former law firm to the tune of $320 million. There are cases still pending in the matter against Goldman Sachs, Merrill Lynch, and consultant Arthur Andersen. In November, a settlement regarding the company’s pension plan was reached with plan participants, worth $79 million (See Global Crossing Settlement Gets Court OK ).