By Zach Kouwe
Gretchen Morgenson had a fantastic column in Sunday's New York Times on a little-followed arbitration suit brought by a group of high-net-worth investors from Denver against Citigroup's Wealth Management division. The amount of the award ($54 million) and the fact that a lot of internal documents are now available piqued my interest. So I dug up some of the documents in the court case mentioned in The Times, which involves Citi's appeal of the arbitration decision. Embedded below is the answer the high-net worth investors filed in response to Citigroup's appeal.
It's intriguing not so much because of the alleged fraud that took place, but because the suit names Citi's top producing wealth advisor from 2001 to 2008 (who subsequently joined Credit Suisse) and the supporting documents include a letter written to CEO Vikram Pandit and head of wealth management Sallie Krawcheck by a Citi wealth manager begging the bank to make their clients whole on a money-losing fixed-income product they say was misrepresented as a safe investment. It's the same old story from the Financial Crisis - did the bank intentionally misrepresent the risks or was this an unprecedented event no one could have foreseen? You decide. Here are some of the documents.
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