Finally a win for the little guys. Those of us who feel victimized by Jack Grubman and his bosses at the Citigroup, have now a legal recourse to recoup some of that money.
Citigroup announced today that it has settled class action litigation brought on behalf of purchasers of WorldCom securities which was pending in the United States District Court for the Southern District of New York as In re WorldCom, Inc. Securities Litigation, No. 02 Civ. 3288 (DLC). Under the terms of the settlement, Citigroup will make a payment of $2.65 billion, or $1.64 billion after tax, to the settlement class, which consists of all persons who purchased or otherwise acquired publicly traded securities of WorldCom during the period from April 29, 1999 through and including June 25, 2002. (read the press release)
According to the New York Times, “Citigroup, which admitted no wrongdoing in the settlement, said it has increased its reserve for other pending class-action cases against it to $6.7 billion. That figure excludes the WorldCom settlement costs.” It is funny because if you were not guilty, then why the hell did you decide to pay out nearly $2.65 billion in settlement money. But the bad news is not over. Salomon Smith Barney, which also employed Jack Grubman had its hand in so many telecom initial public offerings and secondaries that the legal attacks, quaintly known as lawsuits keep coming. And they should. But this is clearly a good day for those who lost their money.