MANHATTAN (CN) – An investment company claims Citigroup sold it $50 million in “Falcon Funds” by fraudulently claiming that only $200 million of the $16 billion in Falcon Funds was invested in subprime mortgage-backed securities. But in fact, Falcon held $500 million in subprime mortgage-baked paper and another “large block of its assets invested in high-risk adjustable rate mortgage securities and subprime mortgage backed securities,” says plaintiff MJX Plus.
MJX Plus says it lost at least $25 million of its $50 million investment due to defendants’ fraud, concealment and misrepresentations about the subprime mortgage-backed paper.
Defendants are Citigroup Inc., Citibank NA, Citigroup Alternative Investments LLC, and Falcon Strategies Two LLC.
MJX is represented in Federal Court by Richard Schaeffer with Dornbush Schaeffer Strongin.