Citi sued by Norwegian central bank
Inevitable, really. Though we wouldn’t have expected the staid Norwegian central bank to be the first (?) to take up legal arms.
After the US Securities and Exchange Commission exposed Citi’s super senior subprime slip — in which the bank misled investors over its subprime exposure between July and October 2007 — now come the lawsuits.
The SEC fined Citi $75m for the subprime deception. Norges Bank is suing over $835m worth of losses on Citi shares and bonds incurred between January 2007 and 2009. (For those wondering — in addition to overseeing monetary policy, Norges also looks after the international investments of Norways’ humongous sovereign wealth fund).
But the 221-page complaint goes much further than just the super senior CDO/liquidity put kerfuffle. In fact, it reads like a laundry list of complaints against the US bank — from “unrealistic” CDO models, to Repo 105, GAAP and SEC violations, etc., etc.
It also names Citi CEO Vikram Pandit and former CEO Chuck Prince, personally (along with some 20 other bank execs).
DealBook has the story and the complaint.http://ftalphaville.ft.com/blog/2010/09/24/352676/citi-sued-by-norwegian-central-bank/