Citigroup Faces Derivative Suit Alleging Internal Control Issues

Citigroup Inc.'s board of directors misled investors about the scope of the company’s problems with deficient internal controls, a shareholder derivative suit filed in federal court in New York says.

The investment bank’s directors failed to tell investors that it wasn’t complying with the terms of controls-related settlements with federal regulators, according to the complaint filed in the U.S. District Court for the Southern District of New York.

“In several instances, years after entry of a consent order, the deficient internal controls remained deficient while the Board extolled its supposedly robust regulatory compliance programs in proxy solicitations,” the complaint says. ...