Citigroup, Wachovia face hedge fund lawsuits: report : US Business

NEW YORK (Reuters) - Citigroup Inc and Wachovia Corp are facing separate lawsuits filed in a U.S. Federal court in New York by a small fund, the Wall Street Journal reported on Tuesday.

The suit claims that the banks each improperly required the fund to pay out more money from insurance derivatives contracts known as credit default swaps amid a decline in the value of the mortgage-backed bonds, said the Journal.

Both suits were filed last month by VCG Special Opportunities Master Fund Ltd, a Florida hedge fund with $58 million in capital.

Citigroup and Wachovia were not immediately available for comment.

(Reporting by Yinka Adegoke; Editing by Quentin Bryar)

(c) Reuters 2008. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.