In an opinion today, Judge Stein dismissed a case accusing Citibank of fraud and negligent misrepresentation for understating its exposure to mortgage-backed securities.  He dismissed the case because the plaintiffs were “holders” of the stock during the relevant time period (i.e., they did not buy at inflated prices and sell at a loss), and relied principally on a First Department decision in 2010, Starr v. AIG, which held that “holders” could not bring claims.  Judge Stein rejected the argument that Starr would not be adopted by the Court of Appeals:
Continue Reading Judge Stein Concludes Security “Holders” Cannot Bring Fraud Claims Under New York Law, Dismisses Case Against Citi