The U.S. Court of Appeals for the Second Circuit on Tuesday upheld the dismissal of developer Sheldon Solow’s securities fraud suit against Citigroup, affirming a lower court’s May ruling that the bank did not cause Solow to lose money on stock holdings by playing up its financial health, Law360 reported.
Before the 2008 financial crisis, Citibank had claimed that it was well-capitalized, and Solow said that the bank’s statement prompted him to buy 40,000 shares of its stock for roughly $500,000.
The three-judge panel said the bank met the regulatory definition of the term at the time. Moreover, the appellate court also dismissed Solow’s claim that the bank’s statement caused him to hold its stock through the beginnings of the financial crisis. Solow sold the stock in March 2009 for $50,000, but the court said that he had failed to prove that the bank’s statements “proximately caused” losses.
Solow, who jumped to No. 111 on Forbes’ list of richest Americans in 2012, is a consummate bringer of lawsuits, but he has also been on the receiving end. In August, Solow was sued by one of his top executives, who claimed that he was dismissed without cause and didn’t receive his retirement package, as The Real Deal previously reported. [Law360]- Hiten Samtani