Citigroup Investors Get New Shot to Hold Directors Accountable

By Jacob Rund

Citigroup Inc. investors are getting another chance to argue claims that the bank’s current and former directors are responsible for costly anti-money laundering and other violations.

The Oklahoma Firefighters Pension and Retirement System and other pension funds filed a lawsuit in 2016, claiming the directors 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 Delaware Supreme Court on Jan. 25 agreed to remand the case to the chancery court. The shareholders argued that action was necessary based on “new facts” that surfaced this year, including a statement by the Office of the Comptroller of the Currency that the bank failed to complete corrective actions imposed by the agency in 2012 for anti-money laundering and Bank Secrecy Act deficiencies.

The OCC said this month it fined Citibank, a Citigroup subsidiary, $70 million for its noncompliance.

The state high court also stayed an appeal from the shareholders pending the resolution of the case by the chancery court. Citigroup declined to comment on the supreme court’s action.

The case is Oklahoma Firefighters Pension & Ret. System v. Corbat , Del., No. 32, 2018, stay granted 1/25/18 .

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