A Citigroup Inc. shareholder has hit a dead end in a lawsuit alleging that the bank didn’t properly investigate its bets on collateralized debt obligations (CDOs).
In a ruling issued on Thursday, the New York Supreme Court Appellate Division, First Department affirmed the dismissal of a shareholder derivative suit brought by Citi investor Stanley Lerner. He alleged that Citi’s former directors—including former CEO Charles Prince and former CFO Gary Crittenden—didn’t take seriously his request for an investigation into the CDO assets, and therefore are liable for breach of fiduciary duty. The First Department disagreed, writing that Citi’s one-man committee-led investigation was sufficient.
