Citigroup Agrees To WorldCom SettlementMay 11, 2004 | UPI
Citigroup, the giant New York financial services firm, has agreed to pay $2.65 billion to settle a suit brought by investors of the former WorldCom.
The plaintiffs lost their investment when the telecommunications giant filed for bankruptcy in 2002 after a multi-billion dollar accounting scandal, the Wall Street Journal reported Tuesday.
After Citigroup's addition of $5.25 billion pretax to reserves, and the payment of the WorldCom settlement, Citigroup will have $6.7 billion in litigation reserves remaining.
Citigroup said it would take a second-quarter after-tax charge of $4.95 billion, or 95 cents a share, to cover the settlement and increase in litigation reserves.
Other cases facing the company involve financing that it arranged for energy giant Enron before its collapse and alleged abuses in the way it allocated shares in hot initial public offerings during the stock-market boom.