The U.S. Supreme Court on January 12, 2026 declined to hear Citigroup’s appeal in the lawsuit that accuses the bank of orchestrating fraud at the bankrupt Mexican oil‑and‑gas services company Oceanografia, which allegedly caused the bank more than $1 billion in losses.
The Oceanografia case stems from cash advances that Citigroup’s Banamex unit provided between 2008 and 2014, despite the company’s heavy debt load and forged Pemex documents. The lawsuit alleges that Citigroup knew of the fraud and failed to exercise adequate internal controls, a claim that led to a $430 million loss for the bank and a 2018 SEC fine for internal control deficiencies. A lower court initially dismissed the case, but an appellate court revived it, finding sufficient allegations to proceed. Citigroup’s appeal to the Supreme Court was limited to bond‑holder claims under the Racketeer Influenced and Corrupt Organizations Act (RICO), which would allow triple damages if the claims were upheld.
By refusing to review the appeal, the Supreme Court has left the RICO claims and the underlying fraud allegations to be decided in the district court. The decision exposes Citigroup to further legal scrutiny and potential financial liability, while also amplifying reputational risk as the bank must continue defending itself in public court proceedings. The case also underscores the bank’s historical challenges with internal controls, as highlighted by the SEC fine and the criminal liability of ten Mexican bank employees found by regulators.
Market reaction to the ruling was negative. Citigroup’s shares fell on the day of the decision, driven by the legal uncertainty created by the Supreme Court’s refusal and by broader political discussions about capping credit‑card interest rates that weighed on bank stocks. Analysts noted that the legal overhang was a key driver of the stock’s pullback, while the policy debate added additional pressure on the banking sector.
Citigroup’s spokesperson, Danielle Romero‑Apsilos, declined to comment on the Supreme Court’s ruling. The bank has previously acknowledged the seriousness of the lawsuit, but has not issued a detailed statement on the potential financial impact. The case will continue in the lower court, and while it does not immediately affect Citella’s earnings, the outcome could influence future financial statements and risk disclosures.
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