$11M Award Against CitiGroup is Vacated by NYC Supreme Court

The New York Supreme Court has vacated the $11M FINRA arbitration award against Citigroup Global Markets Inc. (C) and one of its employees. The securities case is Citigroup Global Markets Inc. v. Fiorilla.

Judge Charles Ramos vacated the award after determining that the parties had agreed to settle the arbitration case for $800,000 before arbitration. He said that it did not benefit the public interest to honor arbitrations of disputes that were settled before they were arbitrated.

The securities case involves a complaint filed by former legal adviser to the Holy See John Fiorilla. He contended that he turned over approximately $16 million of Royal Bank of Scotland PLC (RBS) stock-an inheritance from his dad-to Smith Barney adviser Robert Loftus. The latter is not a party in this arbitration claim.

Fiorilla claims even though the firm said it would provide protection from losses and hedge the highly concentrated the position because Loftus’s supervisors had been negligent the investment stayed overconcentrated. Between 2007 and 2009, the value of the claimant’s investment in the RBS stock dropping from $35/share to $2 share.

Fiorilla asked for a $19.5 million FINRA arbitration award and he was awarded nearly $11 million. Citigroup then filed a motion to vacate claiming that because of the agreement to settle previously, his securities claim should have never gone to arbitration.

FINRA Arbitration
Our FINRA arbitration law firm represents investors with securities claims against financial firms and/or its advisors and brokers. You want to make sure you work with a securities fraud law firm that knows how to file and prepare this type of claim to help you recover your investment losses.

Court overturns $11 million arbitration award against Citigroup, Investment News, January 16, 2014

More Blog Posts:
FINRA Arbitration Panel Orders Citigroup to Pay Senior Investor Couple $3.1M for Alleged Broker Fraud Related to “Selling Away” Practice, Stockbroker Fraud Blog, September 17, 2013