A Denver, Colorado based Financial Industry Regulatory Authority [FINRA] arbitration panel awarded $54,058,948 to two clients of Aidikoff, Uhl & Bakhtiari and Maddox, Hargett & Caruso. The award included punitive damages of $17,000,000 and $3,000,000 in attorney fees. The FINRA arbitrators also assessed the entire cost of the hearing against Citigroup Global Markets, Inc. and ordered the firm to pay $33,500 in expert witness and $13,168 in court reporter costs.
The primary investment complained of was a leveraged municipal arbitrage hedge fund known as Mat/ASTA launched by Citigroup Global Markets, Inc. and sold through both Smith Barney and Citigroup Private Bank, part of Citigroup’s (C) Global Wealth Management Group. These funds were marketed exclusively to high net worth clients of the firm between 2002 and 2007. They were represented as being Fixed Income Alternatives with a slightly higher return than a portfolio of municipal bonds with little added risk. Instead, these funds imploded in February 2008 causing catastrophic losses to investors.
“The award represented a return of more than 100% of our clients’ losses as well as punitive damages,” stated Philip M. Aidikoff of Aidikoff, Uhl & Bakhtiari. Mr. Aidikoff added “Our firm has now served as lead counsel for 16 households in Mat/ASTA arbitration hearings. Twelve of the 16 have received awards of 100 percent or more of their losses and each of the 16 families has won a significant award.”
Shares of Citi dropped 3 cents, or 0.55%, to $4.51 in midday trading.
Disclaimer: This page contains affiliate links. If you choose to make a purchase after clicking a link, we may receive a commission at no additional cost to you. Thank you for your support!