Citibank Accused of $50 Million Boondoggle

     MANHATTAN (CN) – A Citigroup Global Markets broker cost an old man $50 million by playing with his accounts “as if they contained ‘Monopoly money,'” the 73-year-old man claims in Federal Court.

     Fernando Franco claims Citigroup Global Markets, Citibank, and broker Rodrigo Curiel took “complete and total advantage of an elderly, foreign citizen who does not understand English,” and that when Franco’s son finally got wise to the fiasco, Curiel admitted it.
     In his 99-page complaint, Franco says he held his assets personally and through his investment vehicle, co-plaintiff Administradora y Comercializadora Del Valle y Ciudad de Mexico S.A. de C.V.
     Franco says he had held the bank and brokerage accounts since the 1990s with the Mexican Grupo Financiero Banamex-Accival. In 2001, Citigroup acquired Banamex, which became a Citigroup subsidiary.
     Franco says his Citigroup accounts peaked in 2007 at more than $83 million. He says that the defendants, and Curiel in particular, “executed hundreds of transactions that caused Mr. Franco to lose approximately $50 million, and Defendant Citibank, N.A. (‘Citibank’) to profit that same amount, over the course of four years, and failed to disclose the transactions or the losses to Mr. Franco.”
     Through those 4 years, Curiel traveled to Mexico City every month to meet personally with Franco, according to the complaint.
     Franco claims Curiel carried out the scheme and concealed the losses by providing him with summaries, statements and documents in English, which he knew Franco cannot read. Franco “does not understand English. He does not use a computer (except to look at photographs), and did not make use of email until mid-January, 2011,” the complaint states. (Parentheses in complaint.)
     Franco says: “The scheme began to unravel in mid-November, 2010, when Mr. Franco asked his son, Enrique, to attend his regular monthly meetings with Mr. Curiel that were held at Mr. Franco’s office in Mexico City. As set forth below, what Enrique learned at the mid-November meeting totally shocked him. Among the things that shocked him was the fact that Mr. Curiel admitted that he had deliberately provided false information to his father over an extended period of time by hiding millions of dollars of losses and inflating the value of other assets. Enrique then began to attempt to investigate what had occurred.”
     Franco’s son demanded information about the transactions that resulted in the losses: “It was only then that Mr. Curiel, for the first time, disclosed that from 2007 until the end of October 2010, he engaged in over 1,350 foreign exchange (‘FX’) transactions resulting in substantial losses. The details of these transactions were not disclosed to Mr. Franco prior to this time. Similarly, Mr. Curiel entered into an undetermined but extremely large number of commodities transactions and private option contracts with Citibank. The details of these other transactions are for the most part unknown, other than the tremendous losses that they apparently incurred,” according to the complaint.
     Franco demands restitution of $50 million, and punitive damages for federal securities law violations, fraud, fraudulent inducement, negligent misrepresentation, breach of contract, breach of the implied covenant of good faith and fair dealing, breach of fiduciary duty, unsuitable trading, unauthorized trading, churning, failure to supervise, unjust enrichment and conversion.
     He is represented by Blaine Bortnick and James Halter with Liddle & Robinson.
     (S.A. de C.V., often seen in lawsuits involving Mexican institutions, stands for Sociedad Anónima de Capital Variable – Mexico’s equivalent of “Inc.”)

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