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Questions Raised About SEC's Delayed Prosecution of Citigroup For MAT/ASTA Fraud


The recent front page Wall Street Journal article ("Citi Debt Funds Probe By SEC," 11/8/10) highlights the ongoing SEC MAT/ASTA fraud investigation of Citigroup, Inc. and its affiliates. The WSJ reported about several former Citigroup/Smith Barney financial advisors sharing information with the SEC about the sales practices associated with the MAT/ASTA funds that lost more than 75% of their value between 2007 and 2008. The brokers who were mentioned in the WSJ article "blew the whistle" on Citigroup because they obviously believed that it had falsely marketed a flawed product to the brokers' best customers and engaged in other misconduct. The recent $1.8 million arbitration award obtained by Robert Pearce in Kazma v. Citigroup and mentioned in the WSJ article may provide support for the brokers' efforts.

In Kazma, Mr. Pearce proved the MAT/ASTA funds were marketed as a low risk fixed income alternative but they were actually a very high risk equity type alternative investments. He also proved that Citigroup made representations about how it would invest the funds and deviated from those investment guidelines to suit its own financial interests. In Kazma, the arbitrators specifically found that Citigroup was guilty of "negligent mismanagement" and "negligent supervision." The $1.8 million dollar Kazma Award obtained by Mr. Pearce proved the MAT/ASTA debacle was a "product problem" and not a "broker problem." Mr. Pearce reports that Citigroup has even stipulated in one recent arbitration Award that this was a "product problem."

It has been over two and a half years since the SEC began its investigation and yet it has done nothing for MAT/ASTA investors. In the last year, Mr. Pearce has prosecuted over two dozen MAT/ASTA fraud arbitration claims to final resolution. He has reviewed millions of pages of the same documents Citigroup produced to the SEC that evidence misrepresentation and mismanagement of the MAT/ASTA funds. Mr. Pearce, a former SEC prosecutor, states: "there is no plausible explanation for the SEC's delayed prosecution of Citigroup" and urges all Citigroup financial advisors to take the action necessary to get justice for their best customers.

Although Mr. Pearce's offices are located in Boca Raton, Florida, he represents MAT/ASTA investors nationwide. You may contact Mr. Pearce by telephone toll free 800-732-2889, by e-mail to or via his website at for a free MAT/ASTA Investor Report.

A Prudent Case Approach

Mr. Pearce, a former SEC attorney with over 35 years experience, focuses his practice on securities matters. He is a member of the Public Investors Arbitration Bar Association and serves as Chairperson of the SPBCBA Securities Committee. Mr. Pearce has represented hundreds of investors in securities arbitration and have prosecuted multiple MAT/ASTA arbitration claims. He is currently representing almost 50 clients throughout the country in MAT/ASTA cases.

The Law Offices of Robert Wayne Pearce, P.A. follows a multi‑theory approach encompassing three separate bases for recovery, depending on the facts and circumstances of the particular investor's case. These include: (1) MAT/ASTA was a flawed investment product; (2) Citigroup and its affiliates misrepresented and failed to disclose material facts at the time the investor was sold the investment; and (3) Citigroup and its affiliates were guilty of negligent mismanagement of MAT/ASTA and negligent supervision of their employees. We believe that this approach gives investors three separate bases for recovering damages and enhances the likelihood of an award. We prefer not to put all of our clients' "eggs in one basket."

If you are seeking a law firm with integrity, dedication, and substantial experience in MAT/ASTA fraud and mismanagement disputes, please schedule a confidential consultation with Mr. Pearce today. Call our firm at (561) 338-0037 or toll-free at 1-800-732-2889, or fill out our intake form to schedule your free consultation.

Free Consultation With Attorneys Who Can Handle Your Securities and Commodities Problems

Contact The Law Offices of Robert Wayne Pearce, P.A., in Boca Raton to discuss your MAT / ASTA claim. The firm can be reached by phone at 561-338-0037, toll free at 800-732-2889 or via e-mail.

Client Reviews
Robert Pearce is part of that unusual breed of lawyers that are able to create empathy with clients and thoroughly adopt their cause. No half efforts here. He and his group of professionals are outstanding strategists that can execute with precise fervor and unyielding determination. Theirs is a huge wave of facts, research, precedents and preparation, that has impressed me in its thoroughness and creativity, and most importantly with the results. No stone goes unturned and no effort is ever spared. In my book, he and they are those of a very rare kind that one wants to keep for a very long time. Ramon F.