A federal judge is allowing a portion of a proposed class-action securities fraud lawsuit against Citigroup Inc, several executives and a board member to go forward. In a ruling filed Tuesday, Judge Sidney H. Stein said enough of a claim has been established to proceed with the case filed February 29, 2009, in the US District Court for the Southern District of New York.
The case, filed on behalf of Citigroup shareholders, alleges executives including former CEO Charles Prince and former Chief Financial Officer Gary Crittenden misled investors through misstatements and omissions about the exposure to potential losses in the company's collateralised debt obligations (CDOs), from February 2007 through November 3, 2007.
The ruling finds the case also can proceed against five other executives including Robert Druskin, chief operating officer; Thomas Maheras and Michael Klein, who were responsible for collateralised debt obligations; David Bushnell, former senior risk officer; and Robert Rubin, a board member, who was named chairman after Prince left the company.