2nd Circ. Nails Shut Citigroup ARS Class Action

Law360, New York (March 27, 2012, 5:50 PM EDT) -- A federal judge was correct to dismiss a class action alleging that Citigroup Inc. manipulated the market for auction rate securities, in part because the company disclosed to investors that it would intervene to prevent auctions from failing, the Second Circuit ruled Tuesday.

In refusing to revive the case, the Second Circuit said it didn’t believe investors were truly ignorant about Citigroup propping up ARS markets.

"Plaintiffs cannot plausibly allege that Citigroup was intervening in the ARS market without their knowledge or that they reasonably believed...
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