Citigroup Settles RMBS Class Action Lawsuit for Nearly $25 Million

Orrick - Finance 20/20
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On August 27, lead plaintiffs City of Ann Arbor Employees’ Retirement System and Greater Kansas City Laborers Pension Fund submitted an unopposed motion seeking preliminary approval of a settlement of claims against certain Citigroup entities and their officers under Sections 11, 12, and 15 of the Securities Act of 1933. Plaintiffs originally sued in connection with eighteen RMBS securitizations issued by Citigroup, but the court dismissed the claims as to all but two of those securitizations for lack of standing. The settlement resolves the claims relating to those remaining two securitizations. Under the terms of the proposed settlement, $24,975,000 would be distributed among the plaintiff class such that if claims are submitted by all eligible certificate-holders, the average recovery will amount to roughly $13.25 per $1,000 in initial face value of the certificates. The two sides arrived at this settlement following mediation sessions held before retired U.S. District Judge Layn Phillips. Motion.

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