Citigroup (C) must face a reinstated lawsuit accusing it of knowingly supporting and concealing a large-scale fraud at the Mexican oil services firm Oceanografia, the United States Court of Appeals ruled Thursday.
The court said plaintiffs, including Rabobank, investment funds, and shipping and leasing firms, plausibly alleged that Citigroup substantially aided the fraud and that the lower court erred in dismissing the case.
According to the ruling, Citigroup's Banamex unit provided $3.3 billion in advances to Oceanografia between 2008 and 2014, despite indications the company had forged Pemex authorization forms.
Citigroup later uncovered $430 million in fraudulent loans and paid a $4.75 million SEC fine in 2018 for weaknesses in Banamex's internal controls, the court noted.
The court statement said Citigroup had a financial motive to keep the advances going and allegedly withheld critical information from creditors and investors impacted by the fraud.
Citigroup declined MT Newswires' request for comment.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.