In recent weeks, two Financial Industry Regulatory Authority (FINRA) arbitration panels have awarded more than $2.2 million to clients of Page Perry, Maddox, Hargett and Caruso, P.C., and David R. Meyer & Associates in connection with their purchases of MAT municipal arbitrage fund investments. MAT Five and MAT Three were leveraged municipal arbitrage hedge funds offered by Citigroup Fixed Income Alternatives and sold through Smith Barney. Both MAT Five and MAT Three were marketed only to high net worth clients of the firm as fixed income alternatives. In truth the MAT funds were risky investments that exposed investors to a 100 percent or more loss of principal. The funds imploded in early 2008 causing catastrophic losses to investors.
Despite widespread evidence of material misrepresentations and omissions, Citigroup elected to employ the “blame the customer” defense that the panels rejected. When confronted with evidence that Citigroup misrepresented MAT’s risk level to their brokers who passed the misleading information on to their clients, a high ranking Citigroup official said that it would be “unwise” for customers of the firm to rely on what their broker told them about a recommended product.
The investors’ legal team included the firms of Page Perry, of Atlanta, Georgia, Maddox, Hargett and Caruso, P.C., of New York, New York and Indianapolis, Indiana, and David R. Meyer & Associates of Columbus, Ohio. The law firms continue to investigate and pursue FINRA arbitrations on behalf of Citigroup/Smith Barney customers who suffered losses in fixed income alternative investments, including MAT and ASTA.
Page Perry is an Atlanta-based law firm with over 125 years collective experience representing investors in securities-related litigation and arbitration. For further information, please contact us.