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Citgo Accuses FTC Capital of Risky Investing

MANHATTAN (CN) - Citgo Petroleum Corp. and PDV Holding lost tens of millions of dollars through FTC Capital Markets' mismanagement of their investments, the investors claim in Federal Court. They say FTC misused their money as a "slush fund" for unauthorized trading in "unregistered, risky, illiquid investments."

The plaintiffs say FTC, along with chairman Guillermo David Clamens and employee Lina Lopez, encouraged them to invest in low-risk, short-term CDs and money market funds.

"Yet these defendants did not follow a single instruction given by Plaintiffs to make those investments," the lawsuit claims.

Instead, they put the money in risky investments such as credit default swaps and illiquid international bonds, the plaintiffs claim.

They are represented by Michele Coffey with Morgan, Lewis & Bockius LLP.

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