NEW YORK, June 1, 2010 (GLOBE NEWSWIRE) -- A Financial Industry Regulatory Authority (FINRA) arbitration panel, based in Los Angeles, has awarded more than $550,000 in damages to investors represented by the law firms of Maddox Hargett & Caruso, P.C. and Aidikoff, Uhl & Bakhtiari in connection with their purchase of a fixed income municipal arbitrage investment that was known as MAT Three.
MAT Three was a proprietary leveraged municipal arbitrage hedge fund that was created and launched by Citigroup Global Markets, Inc. and sold through Smith Barney, part of Citigroup's (NYSE: C) Global Wealth Management Group, in February 2006 to only high net worth clients of the firm. The fund imploded in February 2008 causing catastrophic losses to investors.
"Despite widespread evidence that Citigroup misrepresented MAT's risk level to its own brokers, who then passed the misleading information on to their clients, Citigroup elected to employ the 'blame the customer' defense," stated Steven B. Caruso, "which the panel obviously rejected."
"This award represents a return of 100% of our clients' losses and is the second significant investor win in a MAT case for our clients in the past few weeks," according to Philip M. Aidikoff.
"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 Ryan K. Bakhtiari, who added, "In truth, evidence at the hearing demonstrated that MAT Three was a risky investment that not only exposed investors to a 100 percent or more loss of principal, but was 2.5 times more volatile than the S&P 500 and 7.8 times more volatile than a traditional portfolio of municipal bonds. This was not consistent with what our clients had been told by the firm."
The arbitrators also assessed all of the FINRA costs of the hearing against Citigroup Global Markets, Inc.
The investors' legal team includes the firms of Maddox Hargett & Caruso, P.C., of New York, New York and Indianapolis, Indiana; Aidikoff Uhl & Bakhtiari, of Beverly Hills, California; Page Perry, LLC, of Atlanta, Georgia; and David P. Meyer & Associates Co., L.P.A., of Columbus, Ohio.
The law firms continue to investigate and pursue FINRA arbitrations on behalf of investors who suffered losses in fixed income alternatives, including MAT and its affiliated municipal arbitrage fund that was marketed by Citigroup under the name ASTA.
More information is available by contacting an attorney below.