updated 11/10/2010 12:17:51 PM ET 2010-11-10T17:17:51

NEW YORK, Nov. 10, 2010 (GLOBE NEWSWIRE) -- Kirby McInerney LLP, Court-appointed lead counsel, announces that on November 9, 2010, the United States District Court for the Southern District of New York sustained, in substantial part, securities fraud claims against Citigroup, Inc. (NYSE:C) and certain of its senior officers – including Citigroup's former CEO Charles Prince, former CFO Gary Crittenden, and former Chairman Robert Rubin – centering on Citigroup's collateralized debt obligations ("CDOs"). These CDO-related allegations were at the center of the fraud alleged. Pursuant to the Court's ruling, set forth in a detailed 68 page opinion, securities fraud claims alleging violation of sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act") may proceed, on behalf of a proposed class of purchasers of Citigroup common stock during the period between February 2007 and April 2008, against Citigroup and seven of its former officers. The Court also dismissed claims (1) on behalf of investors who purchased Citigroup shares prior to February 2007 and after April 2008, as well as (2) claims that were unrelated to Citigroup's concealment of its CDO exposure.

In essence, plaintiffs alleged that during early and mid-2007, Citigroup experienced, recognized, and concealed a CDO crisis. The complaint details, over the course of hundreds of pages, Citigroup's awareness of its massive CDO holdings and of the risk contained in such instruments, as well as how Citigroup's belated disclosures of its CDO exposures and losses in late 2007 and early 2008 were instrumental in the decline of Citigroup's shares from nearly $50 per share to below $1 per share – a decline that pushed Citigroup to the brink of insolvency. The complaint contrasted Citigroup's internal knowledge and actions with respect to CDOs with its public statements concerning CDO holdings and exposure. As the Court summarized: "Simply put, plaintiffs identify a set of statements that gave the impression that Citigroup had minimal, if any, exposure to CDOs when, in fact, it had more than $50 billion in exposure." The Court noted a contemporary "incongruity between word and deed": at the same time that such statements were issued publicly, Citigroup's internal actions – as detailed at length in plaintiffs' complaint – evinced awareness of CDO risk and of CDOs' "impending collapse".

The Court ruled that, with respect to Citigroup's CDO exposures, plaintiffs' securities fraud claims against Citigroup had been properly pled pursuant to the Private Securities Litigation Reform Act of 1995. The Court also ruled that plaintiffs had sufficiently pled a claim against certain of Citigroup's senior officers for liability as "control persons" of Citigroup, in violation of section 20(a) of the Exchange Act.

Kirby McInerney LLP has specialized in complex litigation, including securities class action, for several decades. The firm has repeatedly demonstrated its expertise in this field, and has been recognized by various courts that have appointed the firm to major positions in consolidated and multi-district litigation. The firm currently serves as lead counsel in a number of prominent lawsuits relating to CDOs and the financial crisis, and has developed substantial insight into complex financial instruments such as CDOs. The firm's efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling hundreds of millions of dollars, and its achievements and quality of service have been chronicled in numerous published decisions. More information about the firm, class actions in general, or this suit can be obtained through Kirby McInerney LLP's website at http://www.kmllp.com .

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