Citigroup was sued on Thursday by Braintree Laboratories Inc over its sale of auction rates securities. The suit claims that bank sold $33.2 million of the ARS as money market instruments
“The June 2008 through August 2008 sales of auction-rate securities ran parallel to both Citigroup’s internal investigations into its fraudulent marketing practices and its negotiations with multiple government agencies,” Braintree said in a complaint filed in Federal Court in Boston, according to Bloomberg.
Citigroup agreed last year to buy back $19.5 billion in the securities from individual investors, charities and small businesses to settle similar claims.
Braintree said the securities were illiquid and could not be redeemed until 2030. It also said Citigroup refused to buy them back.
Braintree has asked the court to receive full payment for the securities and other damages.