Citigroup Can Keep $41M Sought Over ARS: 1st Circ.

Law360, New York (October 12, 2010, 5:14 PM EDT) -- A federal appeals court ruled Tuesday that Braintree Laboratories Inc., which has $41 million tied up in now-illiquid auction rate securities, has no right to have the money refunded while it fights with a Citigroup unit over an alleged fraud.

The Braintree, Mass.-based company wanted a preliminary injunction to force Citigroup Global Markets Inc. to immediately turn over money spent on ARS, even though the two are still disputing whether Braintree was illegally tricked into buying them.

A three-judge panel of the U.S. Court of Appeals...
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