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Citi, Barclays settle Lehman dispute

Citigroup has settled a lawsuit against Barclays in which it sought to recover more than $141 million for providing foreign exchange services to a unit of Lehman Brothers Holdings during the 2008 financial crisis. In a letter filed on Thursday with the U.S. District Court in Manhattan, the banks said they had reached an agreement in principle to resolve the case. Terms were not disclosed. U.S. District Judge Lorna Schofield dismissed the lawsuit without prejudice and gave Citigroup 30 days to refile if warranted. The case related to Citigroup’s role in the Continuous Linked Settlement system, which was designed to ensure that foreign exchange trades are completed. Citigroup said it sought to stop settling trades for Lehman’s brokerage unit on 17 September 2008 two days after Lehman filed the largest bankruptcy in U.S. history, because it was incurring large losses. It said that because Barclays was then buying Lehman’s U.S. broker-dealer business, the British bank urged it to continue the services, and would cover its losses from Sept. 17 to 19.

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