Citigroup Calls for Dismissal of New York Lawsuit Over Online Scams

Citigroup Lawsuit - Citigroup Inc (C) lawyers requested a US District Judge to dismiss a lawsuit filed by New York Attorney General Letitia James, which accuses Citibank of failing to reimburse customers for online scams [1] - The lawsuit, initiated in January 2024, claims Citibank's inadequate security measures allowed scammers to easily infiltrate customer accounts and steal deposits through unauthorized wire transfers, resulting in millions of dollars in losses for customers [2] - Citigroup argued it has strong procedures to protect customers from fraudulent transfers and follows all laws and regulations related to wire transfers, urging the court to dismiss the lawsuit based on the Uniform Commercial Code, which allows exceptions for banks with commercially reasonable security measures [3] Federal Reserve Enforcement Action - On October 1, 2024, the Federal Reserve terminated a decade-long enforcement action against Citigroup related to weaknesses in its anti-money laundering (AML) practices, which was initially raised in March 2023 by the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency [4] - The enforcement action, which did not include any fines, was filed against Citigroup and its subsidiaries Banamex and Citibank N A over concerns about compliance with AML regulations and the Bank Secrecy Act [4] Legal Troubles in Finance Industry - In October 2024, TD Securities USA, the US broker-dealer unit of The Toronto-Dominion Bank (TD), agreed to pay over $20 million in a settlement with US authorities over allegations of manipulating the US Treasuries market through spoofing between April 2018 and May 2019 [5] - Wells Fargo & Company (WFC) faced a class-action lawsuit in September 2024, accused of underpaying interest to clients in its cash sweep program, leading to substantial financial losses for clients while the company profited significantly from these funds [5]