BEVERLY HILLS, Calif., Aug. 24, 2010 (GLOBE NEWSWIRE) -- A Los Angeles based Financial Industry Regulatory Authority (FINRA) arbitration panel awarded $1,012,000 plus interest to three clients of Aidikoff, Uhl & Bakhtiari and Maddox, Hargett & Caruso, P.C. that purchased Mat Five and Mat Three.
Mat Five and Mat Three were leveraged municipal arbitrage hedge funds launched by Citigroup Global Markets, Inc. and sold through Smith Barney, part of Citigroup's (NYSE:C) Global Wealth Management Group between 2002 and 2007. The funds were marketed exclusively to high net worth clients of the firm. Mat Five was launched in February 2007 and imploded along with the other Mat funds in February 2008 causing catastrophic losses to investors. An identical product known as ASTA was marketed and sold to clients of the Citi Private Bank.
"The arbitrators finding Citigroup liable is a significant win for Mat investors," according to Ryan K. Bakhtiari who along with Steven B. Caruso represented the investors at the hearing.
"The fund was represented by Citigroup to its brokers as a fixed income alternative with the volatility of the Lehman Brothers Aggregate Bond Index," stated Mr. Bakhtiari, who added: "In truth, evidence at the hearing demonstrated that Mat was a risky investment which subjected investors to a 100 percent or more loss of principal."
"This award demonstrates that even the most sophisticated investors were misled by Citi in the marketing and sale of the Mat and ASTA leveraged municipal arbitrage product," stated Mr. Caruso.
In May 2010 two Los Angeles based Financial Industry Regulatory Authority (FINRA) arbitration panels awarded more than $2.2 million to clients of Aidikoff, Uhl & Bakhtiari and Maddox Hargett & Caruso, P.C.
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