Citigroup Affiliates to Pay $180 Million to Settle Hedge Fund Fraud Charges

Posted on August 27th, 2015 at 11:58 AM
Citigroup Affiliates to Pay $180 Million to Settle Hedge Fund Fraud Charges

From the Desk of Jim Eccleston at Eccleston Law LLC: 

Two Citigroup affiliates, Citigroup Global Markets Inc. (CGMI) and Citigroup Alternative Investments LLC (CAI), have agreed to pay nearly $180 million to settle charges that they defrauded investors in two hedge funds.

The ASTA/MAT Fund was a municipal arbitrage fund that purchased municipal bonds and used a Treasury or LIBOR swap to hedge interest rate risk.

The Falcon Fund was a multi-strategy fund that invested in ASTA/MAT and other fixed income strategies, such as CDOs, CLOs, and asset-backed securities.

The funds, both highly leveraged, were sold exclusively to advisory clients of Citigroup Private Bank or Smith Barney by financial advisers associated with CGMI. Both funds were managed by CAI. Neither Falcon nor ASTA/MAT was a low-risk investment.

According to the SEC, Citigroup affiliates made false and misleading representations to investors in those two hedge funds, which collectively raised nearly $3 billion in capital from approximately 4,000 investors before collapsing, without disclosing the real risks of the funds.

The attorneys of Eccleston Law LLC represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services.

Related Attorneys: James J. Eccleston

Tags: Eccleston Law LLC, James Eccleston, eccleston, Eccleston Law, citigroup global markets, citigroup alternative investments,

Return to Archive



If you are being bothered by the Regulators, call Eccleston Law, you won't regret it.

Rick R.


January 18, 2022
New York Advisor Receives 17-Year Prison Sentence Over Ponzi Scheme

A New York-based advisor, Perry Santillo, received a 17-year prison sentence for his role in operating a Ponzi scheme that generated at least $115 million from more than 1,000 investors.

January 17, 2022
J.P. Morgan Seeks TRO Over Departing Advisor

J.P. Morgan Chase’s brokerage business has requested that a Louisville, Kentucky, federal court issue a temporary restraining order (TRO) barring one of its former advisors from soliciting its clients.

January 14, 2022
Ohio Advisor Pleads Guilty In $9.3 Million Ponzi Scheme

A former Northeast Ohio-based advisor, Tara Brunst, has pleaded guilty to her role in a $9.3 million Ponzi scheme.