The University of California is scheduled to receive a $13.25 million settlement from Citigroup and its former Salomon Smith Barney subsidiary (now known as Citigroup Global Markets) in a lawsuit arising from the WorldCom Inc. securities fraud. By pursuing a separate action, the university was able to achieve a better result than what it would have received had participated as a class member in the WorldCom federal class action, according to a UC news release.
UC filed a complaint on Feb. 13, 2003 under California securities fraud law in San Francisco Superior Court against Salomon Smith Barney, Citigroup Inc. and Arthur Andersen LLP, accusing them of being involved in the staggering financial collapse of WorldCom. UC's complaint alleged that WorldCom, with the complicity of the defendants, engaged in a massive accounting fraud that inflated the price of its stock, damaging shareholders such as the university.
To read the release, click here.
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