Citigroup Inc. was ordered by brokerage-industry arbitrators to pay more than $1 million to three investors in its municipal-bond funds.
The clients had accused the New York-based bank’s global markets unit of breaching fiduciary duty and other misconduct tied to their investments in funds known as MAT Five and MAT Three, according to an Aug. 23 Financial Industry Regulatory Authority award. The three-member arbitration panel didn’t explain its reasoning for the ruling.
“The fund was represented by Citigroup to its brokers as a fixed-income alternative,” Ryan Bakhtiari, an attorney for the claimants at law firm Aidikoff, Uhl & Bakhtiari, said in a statement. “In truth, evidence at the hearing demonstrated that MAT was a risky investment.”
The ruling “is inconsistent with other decisions and we are disappointed that these claims were not dismissed,” Citigroup spokesman Alexander Samuelson said
In May, arbitrators dismissed a $1.5 million claim brought by another investor in the funds, according to decisions posted on Finra’s website. In two other rulings that month, arbitrators ordered the company to pay plaintiffs a total of more than $2 million.