Judge Tosses ARS Lawsuit Against Citigroup

Law360, New York (September 11, 2009, 6:26 PM EDT) -- A federal judge has dismissed a consolidated proposed class action against Citigroup Inc., brought by purchasers of auction rate securities who effectively lost their investments when the ARS markets became illiquid.

Judge Laura Taylor Swain of the U.S. District Court for the Southern District of New York dismissed on Friday all claims against Citigroup, which ran an ARS market that, like many others, failed in February 2008.

Though Judge Swain found the complaint had at least two “fatal” defects as written, she dismissed it without prejudice...
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