The plaintiffs, private individuals suing on behalf of the State of California, alleged that multiple municipal bond underwriters defrauded the state by falsely representing that they would underwrite the state’s bonds and obtain the “best price” and “lowest yield” on those bonds. The San Francisco Superior Court held that the plaintiffs failed to plead their claims with the heightened particularity required by the California False Claims Act and, in particular, failed to articulate specific facts showing how the defendants’ representations were false when made or that the defendants acted with scienter. Moreover, the court dismissed the plaintiffs’ claims with prejudice because they failed to show that these pleading defects were curable. Judgment was entered on April 15, 2019 dismissing the case.

The KYL team of Peter R. Boutin and Christopher A. Stecher worked with Paul, Weiss, Rifkind, Wharton & Garrison LLP in representing Citigroup Inc. and Citigroup Global Markets Inc. in the case.