On May 28, Allstate Insurance Co. dismissed its lawsuit against Citigroup Inc. and several of its affiliates after reaching a settlement with defendants. The suit related to $200 million of RMBS certificates that Allstate allegedly purchased from Citigroup. Allstate asserted several claims under the federal securities laws and state common law, alleging that Citigroup made material misstatements and omissions concerning the underwriting guidelines used to originate the mortgage loans backing the RMBS at issue, the results of Citigroup’s due diligence, and certain statistical characteristics of the loans, including owner-occupancy and loan-to-value. The settlement came 15 months after the case was remanded to New York state court and 6 months after oral argument on Citigroup’s motion to dismiss. Stipulation.
Citigroup Inc.
Citi Settles FHFA’s $3.5B RMBS Suit
On May 28, the FHFA, acting on behalf of Fannie Mae and Freddie Mac, dismissed its lawsuit against Citigroup Inc. and certain of its affiliates and employees after reaching a settlement with defendants. The lawsuit related to over $3.5 billion in RMBS that Fannie Mae and Freddie Mac allegedly purchased from Citigroup. The suit was one of 18 cases filed by the FHFA against a number of investment banks between July and September 2011. In this case, as in the others, the FHFA asserted a number of state and federal securities claims alleging that Citigroup made material misrepresentations and omissions in the offering documents for the RMBS at issue. This is the second of the 18 cases, along with the case against General Electric, in which the FHFA has reached a settlement. Stipulation.