Citigroup settles with WorldCom investors

/ Source: The Associated Press

Financial services giant Citigroup has agreed to pay $2.65 billion to settle class-action suits brought by investors who bought WorldCom Inc. securities before the telecommunications company's bankruptcy filing in 2002.

Citigroup's brokerage division was a key backer of WorldCom securities before it filed for the biggest bankruptcy in history in July 2002 amid accounting irregularities.

The settlement announced Monday comes as the world's biggest financial services company set aside another $6.7 billion for potential claims against it related to the collapse of Enron Corp. and its April 2003 settlement of federal inquiries into its investment research activities and its involvement in initial public stock offerings.

In the WorldCom settlement, Citigroup said it had agreed to settle federal class action suits brought on behalf of those who had purchased WorldCom stock and other securities during the period from April 29, 1999 through and including June 25, 2002.

Charles Prince, chief executive of Citigroup, said the settlement was part of an effort "to put an unfortunate chapter behind us so we can focus on our continuing prospects for growth."

Under the settlement, Citigroup said it denied violating any law but was settling "solely to eliminate the uncertainties, burden and expense of further protracted litigation."