The Securities Law Firm of Klayman & Toskes says that following its announcement that it is investigating Citigroup’s ASTA and MAT Funds, the Law Firm has received numerous inquiries from investors who sustained losses in these Funds. Accordingly, Klayman & Toskes will be continuing to file individual arbitration claims with the Financial Industry Regulatory Authority (“FINRA”) on behalf of investors who have suffered losses in the ASTA and MAT Funds. While various class action lawsuits have been filed regarding Citigroup’s alternative investments, Klayman & Toskes’ clients are opting out of these class actions and filing individual arbitration claims with the Financial Industry Regulatory Authority (“FINRA”).
Investors of the Funds have been given a tender offer by Citigroup in exchange for a release of all legal claims. However, investors of the Funds should cautiously study such offers, and are strongly encouraged to consider all of their legal rights before agreeing to accept any offers from Citigroup. According to Klayman & Toskes’ investigation of Citigroup’s proposed tender offer, investors will most likely recover a higher percentage of their losses by filing an individual arbitration claim against the brokerage firm.
Following the launch of the Funds, Citigroup solicited several of its high net worth customers, many of whom were retirees, to invest in the Funds. Within its sales pitch, Citigroup represented the Funds to be fixed income products that could provide higher yields, and that the Funds were “safe” and “secure” investments, not subject to a significant amount of volatility.
According to one Complaint filed against Citigroup, “one type of investment Citigroup promoted to its investors was municipal bond opportunities involving the arbitrage of tax-exempt and taxable bonds. These were actually very risky investments which could drop precipitously if the markets changed, or if the investments were not properly managed.”
Presentation materials for the Funds were provided to Citigroup’s customers along with the distribution of hundreds of millions of dollars of shares. The presentation materials are alleged to be “false and misleading in that the strategy to be employed would not protect investors as suggested by the ratings of the underlying investments.” Further, it is believed that Citigroup failed to implement risk management strategies to prevent the Funds’ management from investing the Funds’ assets in risky and speculative investments.