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Citigroup Alternative Investments LLC Falcon Strategies Two B LLC Hedge Fund Investor Securities Class Action Lawsuit 05/20/2008

  • If you tendered or are being asked to tender their shares of Falcon Strategies Two LLC, a fund affiliated with defendant Citigroup Inc (NYSE: C), in connection with a tender and exchange offer, on the basis of a Confidential Tender and Exchange Offer Memorandum, dated May 8, 2008, you may have certain options. Please contact the Shareholders Foundation, Inc.

  • To have your information reviewed for options and to receive notifications about this case, please send an email to mail@shareholdersfoundation.com, or call us at (858) 779-1554.

Lawsuit Overview

Case Dismissed
Company
Citigroup
Security
NYSE: C

Case Name
Citigroup Alternative Investments LLC Shareholder Class Action Lawsuit 05/20/2008
Type of Lawsuit
Shareholder Class Action
Court of Filing
U.S. District Court for the Southern District of New York

Class Period Begin
Class Period End
Deadline To File for Lead
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Summary

July 22, 2008 - The plaintiff files a notice of voluntary dismissal without prejudice.

July 22, 2008 - The case was voluntarily dismissed.

May 20, 2008 - An investor in shares of Falcon Strategies Two LLC filed a lawsuit in the U.S. District Court for the Southern District of New York on behalf of all persons or entities who have tendered or are being asked to tender their shares of Falcon Strategies Two LLC, a fund affiliated with defendant Citigroup Inc (NYSE: C), in connection with a tender and exchange offer, on the basis of a Confidential Tender and Exchange Offer Memorandum, dated May 8, 2008, that contains materially misleading statements and omissions. The complaint alleges claims under Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Delaware law. The complaint alleges that, unbeknownst to investors, Falcon Strategies Two LLC’s investment approach was not conservative but was instead highly leveraged on the condition of the credit markets and liquidity in the bond markets. In this regard, Falcon Strategies Two LLC’s investments were more akin to derivatives.

According to the complaint, in fact, Falcon Strategies Two LLC employed municipal bond arbitrage, carried commercial debt obligations and held asset-backed mortgage instruments that were intrinsically tied to the condition of the credit and bond markets.

Moreover, Falcon Strategies Two LLC heavily invested in funds under the Citigroup umbrella that employed these investment strategies. When these markets failed, the underlying investments declined in value.

Defendant Falcon Strategies Two LLC is a Delaware limited liability company that was purportedly formed on April 27, 2004 to serve as a multi-strategy fixed income alternative seeking to provide investors with absolute returns, current income and portfolio diversification.

Falcon Strategies Two LLC, which commenced operations on October 29, 2004, claimed to invest in a select combination of fixed income strategies to achieve attractive risk-adjusted, and in some cases “absolute,” returns.