International Lawsuits Begin to Build Momentum Against Wall Street Thugs
This post originally appeared on RingofFireRadio.com.
The Argentinian government has filed a lawsuit against Wall Street firm CitiGroup over debt repayments that Argentine officials say violate national laws, reported The Guardian.
Part of the lawsuit states that the country seeks to file criminal charges against employees of the Argentinian arm of CitiGroup. The bank said in a filing with the Securities and Exchange Commission that Argentine officials had “taken certain adverse actions against Citi Argentina, including filing a lawsuit against Citi Argentina and instituting a suspension of certain activities.”
Because of this bad debt deal, the Argentine government wants not only to file charges against CitiGroup employees, but implement sanctions that bar any future operations within the country. This dispute between Argentina and CitiGroup comes during friction between the country and two other financial institutions, NML Capital and Aurelius Capital Management.
The two institutions did not accept a deal to restructure Argentina’s national debt. Argentina apparently owes a “holdout” debt of $1.3 billion to the two hedge funds, and U.S. judge Thomas Griesa ruled that it must pay that amount before receiving a restructuring deal.
Because Argentina senses a banking scam run by CitiGroup and accuses Griesa of being a banking crony, the country has ignored the judge’s ruling and blocked Citi’s capital market operations and suspended the leader of Citi’s Argentine operations, Gabriel Ribisich — who has been accused of misconduct.
The BBC recently reported that CitiGroup may plead guilty to accusations of manipulating exchange rates in foreign currency markets. Wall Street and Griesa’s cronyism have backed Argentina in a tough spot. Unrealistic expectations and international bullying pushed the country into default as Argentina is refusing to pay the hedge funds, NML and Aurelius.
Despite Argentina’s perceived woes, Citi is on the defensive as the bank worries that it will be “expose[d] to . . . further litigation and penalties.” Hopefully, the lawsuit and sanctions will send a clear message that Wall Street can’t go around bullying other countries.