Citi Dodges Derivative Suit Over MBS Investments

Law360, New York (May 17, 2011, 10:08 PM EDT) -- A federal judge in New York tossed a derivative suit brought by Citigroup Inc. shareholders on Tuesday, saying the plaintiffs should have demanded action from the bank's board of directors before suing Citigroup executives over the company's investments in mortgage-backed securities.

The plaintiffs had not demonstrated they doubted the board would have objectively responded to a demand for an internal investigation, which would have excused them from the presuit demand requirement under the Federal Rules of Civil Procedure, U.S. District Judge Sidney H. Stein said....
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