Articles Posted in Private Equity Fraud

Below is a piece by Bloomberg on our firm’s $383 million claim against Citigroup. There’s more on this case on the firm’s website at https://www.riklawfirm.com/

Citigroup’s Mathur Said to Depart With Hybrid Traders as Pandit Cuts Jobs By Donal Griffin – Dec 9, 2011

Citigroup Inc. (C), the third-biggest U.S. bank, is shrinking a team of traders who deal in “hybrid” products as Chief Executive Officer Vikram Pandit cuts Wall Street jobs, two people familiar with the matter said.

Below is an American Lawyer piece which explains our clients’ pending $383 million FINRA arbitration against Citigroup. It goes on to talk about how there are more and more large and complex cases at FINRA. It’s true. As partner John Rich points out at the end of the article, our firm is involved in other multi-million dollar matters at FINRA. In fact, we handled the Bayou v. Goldman FINRA arbitration case which generated a $20.6 million award, and is mentioned in the article. We think FINRA arbitration will continue to attract sophisticated legal disputes because it is more efficient and timely than court litigation.

Too Big for Their Britches?

Nate Raymond

Below is Bloomberg piece about our client’s $383 million FINRA arbitration claim against Citigroup Global Markets, Inc. related to hedge funds, private equity, and derivatives.

Bloomberg

Citigroup Saudi Deal Haunts Pandit By Donal Griffin – Nov 30, 2011

Below is an On Wall Street piece about our firm’s representation of a Saudi investor in a $383 million FINRA arbitration against Citigroup Global Markets, Inc.

Citigroup Aims to Stop Arbitration From Proceeding By Lorie Konish, On Wall Street October 7, 2011

A new lawsuit filed by Citigroup Global Markets Inc. this week against a set of Saudi family investors with a $383 million claim against the firm will determine whether that case can proceed to arbitration.

Below is a story about CGMI’s attempt to stay a $383 million FINRA arbitration filed by our firm related to inappropriate behavior with respect to derivatives, hedge funds, and private equity transactions.

Oct. 6 (Bloomberg) — A Citigroup Inc. unit sued two Saudi investors seeking to block Financial Industry Regulatory Authority arbitration of their $383 million claim that the bank “wiped out” their family’s wealth.

Abdullah and Ghazi Abbar, a father and son from Jeddah who put family money into hedge funds, have no customer agreements or accounts with Citigroup Global Markets Inc., a New York-based broker dealer that they blame for mismanaging their family’s life savings, according to a complaint the Citigroup unit filed yesterday in federal court in Manhattan.

We’ve seen securities fraud, hedge fund fraud, now private equity fraud? Prosecutors have charged Danny Pang who ran Private Equity Management Group in California with an up to $654 million fraud. The Wall Street Journal reported Friday that Pang allegedly extracted at least $83 million in inflated fees. The Pang case is the first high profile private equity fraud publicly reported.

Considering the enormous size of the private equity market, institutional and individual investors should ensure that any private equity investments in their portfolios are with well established, reputable managers. Just like in the hedge fund world, private equity investments often lack complete transparency. The private investment structure leaves room for potential fraud. A place to start is by doing proper due diligence on a private equity funds’ auditor.
We expect as the hedge fund industry is heading toward greater regulation due to the recent string of Ponzi schemes such as Madoff, that the private equity space will attract its own share of fraudsters. Be careful.