Citi faces a $425 million lawsuit for complicity in Madoff’s fraud

Citi is sued for unsavory dealings with Bernard Madoff with the lawsuit seeking $425 million from the bank. According to the Madoff trustee Citigroup Inc tried to pass on its exposure to Bernard Madoff to other banks just months before his fraud was revealed.

Citi saw obvious signs of fraud about Bernard L. Madoff investment Securities LLC as early as 2005 but decided to hold back on it, said Trustee Irving Picard in a court document.

Picard also has sued JPMorgan Chase & Co, Madoff's primary banker, for $6.4 billion, alleging the bank turned a blind eye as Madoff ran a Ponzi scheme.

The lawsuit against Citi was filed on December 8 in U.S. Bankruptcy Court in New York.

It cited one email by a Citigroup Global Markets Ltd trader in September 2008 reaching out to another bank, which was unidentified.

"We're needing to terminate our Madoff trade. Do you have appetite for that risk over there?" the email said.

According to the court document, the other bank responded, "don't think so, madoff is not very popular here either."

Citi said in a statement on Tuesday that the allegations in the lawsuit were false and it would "vigorously defend against these claims."