Citigroup Faces ERISA Lawsuits

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New York, NYTwo lawsuits have been filed against Citigroup alleging the company violated Employee Retirement Income Security Act (ERISA) laws by breaching their fiduciary duties. The lawsuits were filed on behalf of participants and beneficiaries of the Citigroup 401(k) Plan. Citigroup's 401(k) Plan has allegedly suffered over one billion dollars in market losses.

One lawsuit was filed on behalf of Marya J. Leber in New York and claims the company breached its fiduciary duties by putting the company's interests ahead of the Plan's interests. Citigroup allegedly did so by choosing Plan investments that were "offered and managed by Citigroup subsidiaries and affiliates, which generated substantial revenues for Citigroup at great cost to the 401(k) plan."

InvestmentsAccording to the lawsuit, when Citigroup terminated an investment option fund, it almost always moved the assets into a Citigroup affiliated fund. For example, in 2003, four unaffiliated Van Kampen Funds were replaced with four Smith Barney funds, which meant that Citigroup affiliates now had control of the $160 million assets (at the time of the transfer, Smith Barney was a Citigroup affiliate).

The suit is seeking class action status on behalf of the Plan's 190,000 participants.

The second lawsuit was filed on behalf of Stephen Gray, a participant in Citigroup's 401(k) Plan. According to the lawsuit, officials at Citigroup failed to prudently manage the Plan's assets, failed to provide Plan participants with important information regarding Citigroup's financial condition and failed to appoint and monitor the performance of other fiduciaries. Some of the important information that was not disclosed included information about the degree of losses that Citigroup faced.

The lawsuit also claims that Citigroup's share price dropped from $54.26 in June 2007 to $37.73 in November 2007. The plaintiff argues that Citigroup was "seriously mismanaged" and faced a financial crisis, which made company stock a reckless investment. Furthermore, he argues that Citigroup pushed company stock shares as a smart investment for Plan participants. The suit seeks class action status for participants in Citigroup's retirement plans from January 1, 2007 to the present.

Citigroup also faces lawsuits from shareholders who allege the company recklessly spent money purchasing sub-prime loans. According to those lawsuits, Citigroup Inc. lost billions of dollars doing so.

Participants in Citigroup's 401(k) plan who lost money because of Citigroup's alleged securities violations may be eligible to recover some or all of their losses as a result of the lawsuits. If a judge finds that Citigroup willfully violated the law, punitive damages could also be awarded.

Citigroup ERISA Legal Help

If you are a current or former employee and have stocks in the company, please contact a lawyer involved in a possible [Citigroup ERISA Lawsuit] who will review your case at no cost or obligation.

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