Bloomberg News

Citibank Wins Dismissal of Woori Bank Lawsuit Over CDOs

March 28, 2013

Citigroup Inc. (C:US) won dismissal of a lawsuit by South Korea’s Woori Bank Co., which sought to recover $95 million in losses from collateralized debt obligations.

U.S. District Judge Laura Taylor Swain in Manhattan yesterday granted Citigroup’s request to dismiss Woori’s claims because the bank didn’t provide the required detail to show how Citigroup made misleading or false statements that caused Woori to buy the securities. The judge allowed Woori to try to file an amended complaint.

Woori Bank claimed Citigroup used misleading credit ratings to mask the fact that many of the mortgages underlying its CDOs and residential mortgage-backed securities were likely to default, according to a complaint filed May 15.

Woori Bank, a unit of Woori Finance Holdings Co., lost similar rulings in cases it brought against Bank of America (BAC:US) Corp.’s Merrill Lynch unit and Royal Bank of Scotland Group Plc over losses from CDOs.

Christopher Lebsock, a lawyer for Woori Bank, didn’t immediately respond to an e-mail yesterday after regular business hours seeking comment on the ruling.

The case is Woori Bank v. Citigroup Inc., 12-cv-03868, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Edvard Pettersson in the Los Angeles federal court house at epettersson@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.


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