Citigroup Bests Head Trader's CDO Fraud Allegations

Law360, New York (April 30, 2010, 1:07 PM EDT) -- Citigroup Inc. has swept away allegations by a former head trader that the bank defrauded investors by selling collateralized debt obligations constructed around worthless subprime mortgage-backed securities.

Judge Sidney H. Stein of the U.S. District Court for the Southern District of New York dismissed the suit Wednesday, finding that the plaintiffs — Alan Brody and funds he founded, Epirus Capital Management LLC and Dodona I LLC — pled fraud by hindsight instead of proving that Citigroup and its management fraudulently sold investors CDO securities they knew...
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