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Judge allows Citigroup CDO fraud case to proceed

NEW YORK — A federal judge is allowing a portion of a proposed class-action securities fraud lawsuit against Citigroup Inc., several executives and a board member to go forward.

In a ruling filed Tuesday, Judge Sidney H. Stein said enough of a claim has been established to proceed with the case filed in February 2009 in New York City.

The case, filed on behalf of Citigroup shareholders, alleges executives including former CEO Charles Prince misled investors through misstatements and omissions about the exposure to potential losses in the company’s collateralized debt obligations in 2007.

Citigroup and the executives claim the plaintiffs have failed to prove they acted with intent or knowledge of wrongdoing.

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