The lawsuit claims that Citigroup violated its duties as trustee for PIMCO’s 25 private-label trusts from 2004 to 2007 by ignoring deficiencies in how the underlying loans were underwritten or being serviced, which in turn led to losses of around $2.3bn, reports Reuters.
The case was filed in New York state court in Manhattan.
Prudential Retirement Insurance & Annuity and Aegon, the Dutch owner of US insurer Transamerica are among the other plaintiffs.
The plaintiffs are seeking unspecified damages.
American Home Mortgage and Washington Mutual are among issuers who provided the loans backing the trusts.
The trusts were quoted by Bloomberg as saying: "Citibank knew that the pools of loans backing the trusts were filled with defective mortgage loans that materially breached seller representations and warranties."
PIMCO, a unit of German financial services company Allianz, has sued other banks raising similar allegations over other mortgage trusts.
Headquartered in Newport Beach, California, PIMCO employs over 2,000 employees in 13 offices across 12 countries. The company offers investment strategies that encompass the entire risk spectrum and capital structure, including core bonds and credit, structured credit, alternatives, real assets, equities and currencies.
As of 30 June 2015, PIMCO had $1.52 trillion in assets under management.
Image: PIMCO has filed a lawsuit against Citigroup. Photo: courtesy of suphakit73 / FreeDigitalPhotos.net.
