Class Action News

Citigroup To Pay $2.65 Billion In Class Action Settlement

“With this settlement, we have gained an extraordinary recovery for WorldCom bondholders and stockholders. This settlement, while historic, is only the first step. We will continue to pursue our claims against the others who bear responsibility for the debacle at WorldCom, including the remaining 17 underwriters, WorldCom’s auditor, Arthur Andersen, and the former directors and senior officers of WorldCom,” Hevesi said. He continued: “This settlement should serve as a wake-up call to those on whom the investing public depends to guard against corporate corruption such as occurred at Worldcom. Citigroup is a very important financial institution for the nation and New York. We are gratified that Citigroup has put this issue behind it. I would like to particularly thank Citigroup CEO Charles Prince for his leadership in bringing about this settlement and mediators Judge Robert Sweet and Magistrate Judge Michael Dolinger for their essential assistance.”

Hevesi is the Court-appointed Lead Plaintiff in the consolidated securities class action, In re WorldCom, Inc. Securities Litigation, which is pending before Judge Denise Cote in federal court in Manhattan. Hevesi was joined at the press conference announcing the settlement by former New York State Comptroller H. Carl McCall, who initiated the suit. The defendants who have agreed to settle are Citigroup, Inc., Citigroup Global Markets, Inc. (formerly known as Salomon Smith Barney, Inc.), Salomon Brothers International Limited, and former securities analyst Jack Grubman. Together they are the “Citigroup Defendants.”

The settlement resolves all claims asserted against the Citigroup Defendants in the WorldCom securities class action, which fall into two categories: claims arising from WorldCom’s public bond offerings in 2000 and 2001, and claims arising out of the purchase of publicly-traded WorldCom securities in the open market between April 29, 1999 and June 25, 2002 (the “Class Period”).

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	Did You Know?
	Class action lawsuits has many advantages. Class action lawsuits may offer a number of advantages because they aggregate a large number of individualized claims into one representational lawsuit. First, aggregation may increase the efficiency of the legal process, and lower the costs of litigation. Second, a class action ensures that a defendant who engages in widespread harm -- but does so minimally against each individual plaintiff -- must compensate those individuals for their injuries. Third, in "limited fund" cases, a class action ensures that all plaintiffs receive relief and that early-filing plaintiffs do not raid the fund of all its assets before other plaintiffs may be compensated. Finally, a class action avoids the situation where different court rulings could create "incompatible standards" of conduct for the defendant to follow.