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Judge Denies Citi Challenge of $54M FINRA Ruling

A federal judge Wednesday denied a request by Citigroup to overturn a $54 million Financial Industry Regulatory Authority arbitration panel ruling in favor of investors for allegedly telling them that leveraged municipal bond arbitrage hedge funds posed little risk.

Citi had argued that the FINRA panel disregarded the law in its award of 100% of losses, plus punitive damages, to investors Gerald Hosier, Brush Creek Capital LLC, and Jerry Murdock Jr.

Judge Christine Arguello made the ruling in federal district court in Denver.

In April, the Denver-based FINRA panel ordered Citi to pay the $54 million award, which included about $34.1 million in "market adjusted damages," $17 million in punitive damages, $3 million of attorneys' fees, and several thousand dollars of court costs.

The investors filed the claim against Citi in June 2009.