Investors Prevail Over Citigroup In ARS Market-Bust Arbitration

Law360, Chicago (May 21, 2013, 8:37 PM EDT) -- Citigroup Global Markets Inc. must pay $1 million in damages to two Texas companies that faulted the firm for failing to pull their money out of the auction rate securities market before its collapse, an arbitration panel ruled Friday.

The three-member panel — part of the Financial Industry Regulatory Authority’s arbitration program — handed the award to Texas PGI and Paragon Reserve, which lodged claims against CGMI in July 2011 concerning investments in ARS issued by student loan corporations, according to a FINRA filing.

The claims...
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