Citi Ordered to Make a Payout to Investors For Muni Bond Funds

April 15, 2011

I’ve posted about uncertainty in municipal bond funds, but this unrelated.  FINRA recently ordered Citi to pay $51 million to investors in two of its municipal bond funds (the ASTA and MAT funds).

The panel didn’t give any reasoning for its decision, but included $17 million in punitive damages.  My guess that there was some significant misrepresentations about the quality of the bonds in these funds.  If you’re an investor in one of these funds (or other Citi muni bond funds) I’d reevaluate whether the funds are worth keeping.

– hat tip to the Securities Law Prof Blog


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