Citigroup Investors Want Another Chance to Hold Directors Liable

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By Jacob Rund

Citigroup Inc. shareholders are asking the Delaware Supreme Court for another shot at holding the company’s current and former directors responsible for anti-money laundering and other violations that led to billions of dollars in fines.

The Oklahoma Firefighters Pension and Retirement System and other pension funds filed a lawsuit against the directors in 2016, claiming they should be held accountable for the company’s “history of numerous, widespread, and systematic risks and legal compliance debacles” dating back to the financial crisis.

The Delaware Chancery Court dismissed the suit in December, finding the funds hadn’t shown the bank’s board members acted with culpable intent.

The shareholders appealed the decision Jan. 17 to the Delaware Supreme Court, but requested a stay of the appeal the following day. They asked the state high court to remand the case to the chancery court, citing “new facts” that support their allegations of breaches of fiduciary duty.

The funds referenced a recent statement from the Office of the Comptroller of the Currency that said Citibank NA failed to complete corrective actions imposed by the agency in 2012 for anti-money laundering and Bank Secrecy Act deficiencies. The OCC earlier this year announced it fined Citibank $70 million for its noncompliance.

The OCC’s findings and subsequent fine, issued after the chancery court’s ruling, justify sending the case back, the shareholders said.

Citigroup representatives declined to comment.

The case is Oklahoma Firefighters Pension & Ret. System v. Corbat, Del., No. 32,2018, appeal filed 1/17/18 .

To contact the reporter on this story: Jacob Rund at jrund@bloomberglaw.com

To contact the editor responsible for this story: Yin Wilczek at ywilczek@bloomberglaw.com

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