Citigroup (C) 01 (May 08 - Nov 08)

[kennynah]

thanks for this fair warning. Appreciate that

[ishak]

With the market up few hundreds and down few hundreds in a matter of days, it is as good as anybody guess which way it will close everyday. I will take profit when the wind blows in my direction and try not to hold to losing trades in this period.
All the best to you!

[kennynah]

true....trading range.... no clear trend... got profits for durians....take lah.....

and the same best best to you too....

[ishak]

N.Y. Plans Citigroup Fraud Lawsuit
Auction-Rate Securities at Issue

By Heather Landy, Special to The Washington Post, Saturday, August 2, 2008; D01

NEW YORK, Aug. 1 -- New York Attorney General Andrew M. Cuomo plans to imminently sue Citigroup, alleging that the financial-services giant engaged in "fraudulent" sales of bonds known as auction-rate securities by marketing them as a safe investment, his office said Friday.

Cuomo also accused the bank of destroying phone recordings that had been subpoenaed as part of a five-month investigation by his office.

Separately, Citigroup disclosed Friday that it has received subpoenas from the Securities and Exchange Commission and other regulators examining the role that various firms played in the auction-rate securities market, which had chugged along in relative obscurity until it froze up in February -- leaving investors unable to unload the securities -- as the credit crisis deepened.

"Citigroup represented that auction rate securities were safe, liquid and cash equivalent securities," Cuomo's office wrote in a letter sent to the bank Friday. "These representations were false and had a severe detrimental impact on tens of thousands of Citigroup customers."

The letter was sent after settlement talks with the bank broke down, according to a source in the attorney general's office.

Citigroup spokeswoman Christina Pretto said the bank is "actively working with regulatory authorities," including Cuomo's office, and that the company acted in the best interest of clients "both before and since auctions began to fail."

She also said that Citigroup regularly recycles tapes of phone conversations from its trading desks, and that the recycling of a tape requested under the April 14 subpoena by Cuomo's office was inadvertent.

"As soon as we learned of the oversight, we immediately suspended all recycling of tapes and preserved all existing tapes," Pretto said. "We reported this oversight to the regulators, and we have fully cooperated with them in all aspects of this investigation."

Cuomo's office held out the potential for a settlement, saying in its letter that it wants the bank to buy back retail investors' auction-rate securities at full value, reimburse customers for any damages and agree to a "significant penalty for Citigroup's misconduct" during the investigation.

Cuomo filed a lawsuit last month against Swiss investment bank UBS, alleging that more than 50,000 customers were defrauded by the misrepresentation of auction-rate securities. The securities are variable-rate bonds that are put up for bid as often as once a week in auctions that determine their interest rates. Firms such as UBS and Citigroup, known as primary dealers, run the auctions.

Citigroup traditionally would purchase securities left over at auction, the bank said Friday in its regular quarterly filing with the SEC. But Citigroup stopped that practice in mid-February as investors ceased bidding on the securities.

The bank had been the primary dealer on $72 billion of auction-rate securities before the market faltered. As of June 30, its program had shrunk to $48 billion, according to the quarterly filing.

In addition to Cuomo's office and the SEC, state regulators in Massachusetts and Texas also have subpoenaed Citigroup, according to the filing. Besides UBS, Merrill Lynch is among the other banks regulators are examining for their roles in the auction-rate securities market.

Ishak's Comment: Lawsuit in US is a slow moving vehicle, the process typically drag for at least two years.

[kennynah]

ya man....they need to pay a hefty fine and maybe send some fellas to jail for such unscrupulous acts...cause so much hardship to many people...

[blid2def]

Isn't that a similar situation with MER recently? No court case filed for that one yet yah?

[kennynah]

MER kana subpoena meh ? i didnt know leh...

[blid2def]

MER kana subpoena meh ? i didnt know leh...

No that's what I meant. They didn't kena subpoena, but that was my point - wasn't there a complaint about them still trying to convince investors 4 days before some auction rate koyak stuff? Or I remember salahly? Maybe I go dig and see.

[kennynah]

i think bo leh....

anyways, politically MER has to be seen as an investible asset....else many SWFs will kpkb to US govt....i give money then wana sucker me with law suits and make me, as shareholders, pay fines...

so, maybe even if they had made some fraudulent statements...close 1 eye lah....

but then again...these folks may not play fair..hor....

[blid2def]

Okay, lai liao... lai liao....

Source: http://uk.reuters.com/article/marketsNe ... 3020080731

Massachusetts sues Merrill over auction rates
Thu Jul 31, 2008 3:19pm BST

CHICAGO, July 31 (Reuters) - Massachusetts sued Merrill Lynch & Co (MER.N: Quote, Profile, Research) on Thursday, charging the Wall Street firm with fraud over its dealings in the troubled auction-rate securities market.

The case, brought by the Massachusetts secretary of state, charges Merrill with fraud and "dishonest and unethical" conduct for creating and implementing a sales and marketing scheme, which significantly misstated the nature and stability of the auction-rate market. As a result, thousands of investors were abandoned with illiquid investments, the complaint said. (Reporting by Karen Pierog; Editing by James Dalgleish)

I think this is linked to the one I talked about, but not exactly the same report... lemme dig some more.