Citigroup (C) Shares Drop; Madoff Trustee Accuses Bank of Ignoring Ponzi Scheme

Citigroup Inc. (NYSE: C) Shares are down 5 percent to $4.66 in late market movement on Tuesday after a newly unsealed lawsuit shows testimony that the bank had knowledge of Bernie Madoff's Ponzi scheme years before its 2008 collapse.

Madoff trustee Irving Picard said that Citigroup chose to ignore the evidence. Picard is a court-appointed trustee responsible for recovering money for Bernie Madoff's clients. He is seeking $425 million in damages from Citigroup.

Picard is also suing JPMorgan (NYSE: JPM), which was the primary banker for Madoff, for $6.4 billion.

“Citi had access to and received information placing it on inquiry notice that Madoff’s advisory business was potentially a fraud, and/or that Madoff was making hundreds of millions, if not billions, of dollars in avoidable transfers,” according to the complaint filed against Citigroup.

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