A judge gave preliminary approval to Citigroup Inc.'s $2.65 billion settlement of a suit by WorldCom Inc. investors over the underwriting of the long-distance company's securities, the lead investor of the litigation said.
New York State Comptroller Alan Hevesi said Judge Denise Cote of the U.S. District Court for the Southern District of New York approved the agreement. WorldCom emerged from bankruptcy as MCI Inc. this year.
Mr. Hevesi is the trustee of the New York Common Retirement Fund, which Judge Cote appointed to manage the suit for other investors.
The approval permits the New York fund to alert other investors that they have the option to claim a portion of the settlement. A final hearing for settlement approval is scheduled for Nov. 5.
Other investment banking firms, which have not settled with investors, face trial in January, as do former WorldCom officers. The remaining defendants include J.P. Morgan Chase & Co., Bank of America Corp., and other former WorldCom underwriters.
