News Flash- Vanguard Sues Citibank Over $70M of Enron Bonds
April 21, 2003
Vanguard reportedly filed a civil suit against Citibank and Salomon Smith Barney alleging the firms fraudulently sold it $70 million of worthless Enron bonds.
Vanguard claims that the two firms collaborated to disguise the defunct energy trader's mounting debt to Citibank using commodity investment accounts, which were used to back Enron bonds. Those bonds were then sold to investors, including Vanguard, and turned out to be worthless after Enron went bankrupt in 2001, the lawsuit alleges.
Vanguard said its funds were duped into buying the bonds through "false and misleading" financial statements, in which Citibank failed to disclose Enron's true financial situation and its own role in the deals.
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