SONN & EREZ TO REPRESENT MATT V INVESTORS AS AN ALTERNATIVE TO THE CLASS ACTION CASES
On May 1, 2008, a class action was commenced on behalf of all persons or entities who purchased or otherwise acquired shares of MAT Five LLC (“MAT Five”), marketed by Citigroup.
The complaint charges MAT Five, Citigroup Global Markets Inc. (“Citigroup Global”) (the corporate and capital markets arm of Citigroup, Inc.’s (“Citigroup”) (NYSE:C) Corporate and Investment Banking group), Citigroup Alternative Investments LLC (“CAI”), Citigroup Fixed Income Alternatives (“CFIA”) and Reaz Islam with violations of the Securities Act of 1933 and Delaware law. MAT Five is a limited liability company that makes investments in limited liability company interests issued by Municipal Opportunity Fund Five National (“MOF Five”), a limited liability company that makes leveraged investments in fixed-rate, tax-exempt municipal bonds.
Specifically, the complaint alleges that during late 2006 and continuing into early 2007, Citigroup, through CFIA and CAI, targeted many of its clients who were believed to be interested in fixed-income investments which would provide higher yields. One type of investment Citigroup promoted to its investors was municipal bond opportunities involving the arbitrage of tax-exempt and taxable bonds. These were actually very risky investments which could drop precipitously if the markets changed, or if the investments were not properly managed. Defendants are alleged to have caused the PPM and presentation materials for MAT Five (the “Selling Documents”) to be disseminated beginning in 2006 in connection with the issuance of hundreds of millions of dollars of shares. The Selling Documents were false and misleading in that the strategy to be employed would not protect investors as suggested by the ratings of the underlying investments and defendants did not have risk management practices in place to prevent employees of CAI from engaging in highly risky investment practices. On March 20, 2008, CAI wrote a letter to investors which stated that the recent credit crunch had rapidly accelerated and spread into the municipal bond markets. As a result, the cash positions and net asset values of the MAT Five fund had been severely impacted, and they were going to indefinitely suspend the fund’s income distributions in an effort to preserve liquidity.
Sonn & Erez, a securities arbitration and litigation firm in Florida, is representing investors who have lost money in MAT Five. “We feel that investors in MAT Five will get speedier justice in individual arbitration claims rather than in the class action,” said Jeff Sonn, Esq. “Normally, arbitrations from beginning to end take about 12-17 months, with little chance for an appeal, whereas the class actions can take many years, due to the slow pace of federal court and the chance for appeals, which are common in these types of cases,” said Sonn. Arbitration is an alternative to Court and the class action process. In an arbitration, three arbitrators serve as the jury, and decide how much an investor will receive. The arbitration process is quicker because it does not generally allow for any depositions, and the process to get to a final hearing is generally much quicker than the process to get to a trial in court.
