Citi's Hidden MBS Risks Led To Massive Stock Slide: Suit

Law360, New York (October 13, 2011, 3:39 PM EDT) -- Two British pension funds on Thursday sued Citigroup Inc. and 21 of its executives, including its current and former CEOs, alleging they understated the company's exposure to mortgage-backed securities, a move the funds say sparked a two-year stock tumble.

The 200-page complaint, filed in New York federal court, accuses the bank of sugarcoating its MBS risks and failing to sufficiently shore up reserves and write down losses in 2007 and 2008, even as other banks were acknowledging the unraveling securities market.

The extent of Citi's MBS...
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