Citigroup, Inc., disclosed in a Securities and Exchange Commission filing recently that the Massachusetts attorney general has issued a subpoena for materials relating to possible interest-fixing practices that may have affected Massachusetts businesses and agencies. This subpoena follows an earlier one issued in June by the attorney general. Citigroup claims to be cooperating in every way in turning over the requested records and information.
The subpoenas are a result of the ongoing civil business litigation case and investigation into allegations that Citigroup manipulated information to the advantage of certain groups to allow them to borrow money or invest at better rates than those offered to others. These fund groups allegedly sold to customers with high levels of income as an alternative to fixed-rate funds. The attorney general is concerned that both private investors and state agencies may have suffered due to interest rate manipulation.
While the attorney general is involved in this case, it is still a civil business litigation matter. Any criminal charges would be filed separately, and the result of this litigation, if successful, would include payments of damages to any injured victims, including state agencies in Massachusetts.
Most business disputes are handled as private civil disputes; however, given the large scope of this case and the possibility that state agencies might have been affected by these practices, the attorney general has the responsibility for pursuing this business litigation.
While the company involved in this case is quite large, even smaller businesses find themselves involved in business litigation from time to time. Attorneys experienced in business law can provide valuable experiences for business owners who have the need for legal advice.
Source: The Boston Globe, “Citigroup receives subpoena from Massachusetts Attorney General Martha Coakley,” Beth Healy, Aug. 6, 2012