Advertisements
Home News Citigroup Faces €59 Million Lawsuit Over Alleged Misleading IPO Advice

Citigroup Faces €59 Million Lawsuit Over Alleged Misleading IPO Advice

by Celia

Citigroup is under fire with a €59 million lawsuit filed by UK-based investment firm Alcimos, which accuses the Wall Street giant of providing misleading advice during a 2018 effort to launch an initial public offering (IPO) for a Greek property investment. Alcimos claims that Citi’s alleged inaccuracies caused the firm significant financial damage, including the loss of investor support and millions in potential fees.

Advertisements

In late 2017, Alcimos enlisted Citigroup to manage the early stages of the IPO process, with Citi tasked to organize investor meetings and provide feedback. The lawsuit alleges that Citi misrepresented the level of investor interest, claiming that potential investors were uninterested in the listing. According to Alcimos, these same investors had expressed interest directly to the firm, which would have supported the IPO’s viability.

Advertisements

Citi, however, has denied these claims, asserting that the lack of sufficient investor appetite led to the decision to abandon the IPO. The bank’s defense further argues that although it facilitated early investor meetings, it had not entered into a legally binding agreement to act as the sole global coordinator for the proposed deal, known as “Project Alphabet.”

Advertisements

This lawsuit marks another troubling chapter for Citigroup, already grappling with past regulatory fines, including a hefty $135.6 million penalty in the US and a £62 million fine in the UK. In response to Alcimos’s claims, Citi’s senior dealmaker, Linos Lekkas, offered an apology for any communication errors in emails cited by the court, though he emphasized that the relationship with Alcimos was eventually terminated.

Alcimos, which had hoped to raise up to €250 million from the IPO, ultimately abandoned the listing due to deteriorating market conditions and negative investor sentiment linked to Citi’s alleged missteps. The firm claims to have suffered €58.6 million in damages.

Further complicating the matter, Alcimos was placed into liquidation in October following a creditor’s petition, and the UK government’s insolvency service has since assumed control over the company’s affairs.

As Citi battles the lawsuit, the case shines a spotlight on the potential legal risks f

Read more:

Advertisements

You may also like

logo

Bilkuj is a comprehensive legal portal. The main columns include legal knowledge, legal news, laws and regulations, legal special topics and other columns.

「Contact us: [email protected]

© 2023 Copyright bilkuj.com