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Judge Won’t Recuse From Citi Cases Over Husband’s Law Firm Ties

May 5, 2022, 10:44 PM

A federal judge in New York said Thursday that she won’t recuse herself from two cases involving Citigroup Inc. over her husband’s job at a law firm that frequently services the banking giant.

Plaintiffs in a securities suit over Citi’s internal controls sent a letter April 21 to Judge Loretta A. Preska of the U.S. District Court for the Southern District of New York, suggesting that more information was needed to determine if Preska had a conflict of interest. Her husband, Thomas J. Kavaler, works at Cahill Gordon & Reindel LLP, which regularly represents Citi and its subsidiaries in various actions, the plaintiffs noted.

Plaintiffs in a related shareholder derivative lawsuit submitted a letter echoing those concerns May 2.

Preska said that, although class representatives deny they are moving for recusal at this stage, the court construes the letters as motions for recusal and rejects them.

The judge said she does not have a financial interest in the subject matter in controversy, “or any other interest that could be substantially affected by the outcome” these cases. The court held that the “tenuous” relationship between her husband and this case wasn’t enough to warrant a necessary recusal, in part because he doesn’t get a share of the firm’s profits.

“The case law and guidance from the Judicial Conference is clear that the mere fact that a judge’s spouse is employed by a law firm that represents a particular client does not mandate recusal in a case involving that client, especially where neither the spouse nor his law firm represents the client in the proceeding at issue,” the judge wrote.

The plaintiffs in the securities suit are represented by Bleichmar Fonti & Auld LLP. Plaintiffs in the shareholder derivative litigation are represented by Saxena White PA and Berman Tabacco. Citi is represented by Sullivan & Cromwell LLP.

The cases are In re Citigroup Sec. Litig., S.D.N.Y., No. 1:20-cv-09132, 5/5/22 and In re Citigroup Inc. S’holder Deriv. Litig., S.D.N.Y., No. 1:20-cv-09438, 5/5/22.

To contact the reporter on this story: David McAfee in Los Angeles at

To contact the editor responsible for this story: Rob Tricchinelli at