11th Circuit Revives $1B Fraud Lawsuit Against Citigroup Over Mexican Oil Scam

Citigroup is facing a revived $1 billion lawsuit after a three-judge panel from the 11th U.S. Circuit Court of Appeals reinstated claims that the bank knowingly aided a massive fraud involving its Mexican unit, Banamex, and the now-bankrupt oil services company Oceanografía. Plaintiffs, including 30 vendors, creditors, and bondholders, allege that Citigroup funneled $3.3 billion to Oceanografía between 2008 and 2014 despite knowing about forged Pemex signatures and the company's dire financial state. The court found that the plaintiffs sufficiently pleaded that Citigroup employees and agents were complicit in the scheme to inflate Oceanografía's profits and secure hefty interest payments, reversing the previous dismissal by a lower court. This long-running case, which has spanned nearly a decade, could result in significant fines and financial implications for Citigroup if found liable. Despite the legal challenges, analysts maintain a generally optimistic outlook on Citigroup's stock, with some expecting substantial upside. The renewed lawsuit underscores ongoing scrutiny of financial institutions' roles in enabling corporate fraud abroad.