Bloomberg – Robeco-Sage Capital LP, a New York- based fund of hedge funds with $2.2 billion in assets, sued Citigroup Inc.’s Corporate Special Opportunities Ltd. fund, saying it suffered damages after a “disastrous” investment.
Acquired by Netherlands’ Robeco Group in 2002, the fund said in a complaint that John Pickett caused the Citigroup fund, which he started, to conduct a series of “unauthorized” trades in the debt of ProSiebenSat.1 Media AG, Germany’s biggest private broadcaster.
Robeco-Sage wants the Citigroup fund “to make them whole” for alleged damages incurred as a result of the allegedly unauthorized trades, fraudulent statements and the missed opportunity to exit the fund at the end of November 2007, according to a complaint filed yesterday in New York State Supreme Court in Manhattan.
The Citigroup fund halted withdrawals in January “to prevent a forced liquidation” of assets that might lead to additional losses, the New York-based bank said in an e-mailed statement issued at the time. The bank has injected about $100 million into the fund to help stabilize it, Jon Diat, a spokesman for Citigroup Alternative Investments, said in a February interview.
