Citigroup Ordered to Pay Millions after Failing to Supervise
By Tom Costello of Costello Law Group
Citigroup Inc. was ordered to pay clients $3.1 million by an arbitration panel for failing to supervise one of their brokers. The charges against Citigroup were brought after one of their brokers, Scott King, directed a couple into investing in a real estate project. The investors, the Madhany family, invested one million dollars into the project which had eventually gone broke. Before the project went broke, the Madhany’s and other investors cosigned a twelve million dollar loan to help fund the project. Once the project went flat, the investors were then faced with paying back the defaulted loan. The arbitration panel also concluded that Citigroup should pay the Madhany’s part of the money owed from the loan.