Citigroup (NYSE: C) lost a ruling in a case against actor Larry Hagman, which will force the bank to pay $12 million in damages to Hagman who contended that a Citigroup broker mismanaged his and his wife’s assets.
An arbitration board of the Financial Industry Regulatory Authority ruled that the New York-based bank must pay $1.1 million in compensation to Hagman and must donate another $10 million in punitive damages to a charity of Hagman’s choice. Citigroup also must pay $460,000 to pay for Hagman’s attorney fees and other costs.
The board said that Citi “has engaged in serious misconduct” and will enforce punitive damages under its authority.
The claim was filed in May 2009 regarding unspecified securities that a Citigroup broker purchased for Hagman, as well as a life insurance policy purchase. The case was brought against Smith Barney, before Morgan Stanley purchased a controlling stake in the joint venture.
Citigroup Inc. (Citigroup) is a global diversified financial services holding company. The Company provides consumers, corporations, governments and institutions with a range of financial products and services. As of December 31, 2009, Citigroup had approximately 200 million customer accounts and did business in more than 140 countries. Citigroup operates through two primary business segments: Citicorp, consisting of its Regional Consumer Banking (RCB) businesses and Institutional Clients Group (ICG), and Citi Holdings, consisting of its Brokerage and Asset Management (BAM), Local Consumer Lending (LCL), and Special Asset Pool (SAP). In April 2010, Barclays PLC acquired Italian credit card business of Citibank International Bank plc. In May 2010, the Company announced the creation of a new Collateral Management Services unit within its Securities and Fund Services business.
Shares of C traded up 0.24% during trading on Friday, hitting $4.19.
