New York, NY: An $8.5 million settlement has been reached in a securities class action lawsuit pending against Citigroup, brought by employee shareholders who alleged the company concealed its exposure to subprime mortgages prior to its stock price dropping.
The settlement class includes over 7,000 Citigroup employees who acquired securities between November 2006 and June 2009.
Under the terms of the agreement a $2.3 million settlement fund will be established, to include six payments of approximately $50,000 each to the six lead plaintiffs, as an incentive award for their service to the case. The Erisa lawsuit was brought in 2009 by former Citigroup employees who alleged the company prevented employees who had purchased the bank' stock from obtaining information about subprime losses by means of a series of materially misleading statements and omissions concerning its subprime exposure, overall business outlook and financial results.
The lawsuit was originally filed in California, but was later consolidated into a multidistrict securities litigation against Citigroup through New York.
