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Our firm is investigating Citigroup’s management of its Falcon Plus Strategies Fund (“the Falcon Fund”). The Falcon Fund lost almost 53% in the fourth quarter of 2007, and is now down about 75% overall. The losses in the Falcon Fund have been largely attributed to the Fund betting on mortgage-backed and preferred securities and making trades based on the relative values of municipal bonds and U.S. Treasuries. Some Collateralized Debt Obligations (“CDOs”) in the Fund are now worth 25% of their original value. A recently filed lawsuit also alleges that in an attempt defraud investors through the Funds’ “exorbitant fees”, Citi Alternative Investments marketed the Falcon Fund as “low risk” with “low volatility.” It has also been reported that the Falcon Fund managers moved the fund’s assets into a riskier strategy without informing investors of the material change. This past February, Citi bailed out the Falcon Fund with a $500 million line of credit.
While a class action lawsuit regarding the Falcon Fund has been filed in federal court in Florida, KlaymanToskes reminds investors of the benefits of filing an individual arbitration claim, as opposed to participating in a class action. By participating in a class action lawsuit, an investor will most likely recover only pennies on the dollar. However, if one has experienced losses of $50,000 or more in the Falcon Fund, it may be more beneficial for them to file an individual securities arbitration claim. Our firm is also seeking all remedies available under the applicable state statutes, including attorneys’ fees.