[ by Howard Haykin ]

Case Should Go to An Arbitrator - Federal Judge.

Citigroup Inc.,3rd-largest U.S. bank, won dismissal of a suit in which cardholders claimed the bank failed to take adequate steps to prevent a computer security breach that affected more than 360,000 accounts. 

A Northport, NY, couple filed suit in federal court in Manhattan last October seeking to have the case categorized as a class-action lawsuit on behalf of all Citi clients whos bank personal data was stolen.  The couple, Kristina and Steven Orman claimed that they and other Citigroup clients were victims of identity theft and, in their case, money was stolen from their bank account and their credit cards following the breach.

U.S. District Judge Deborah Batts in Manhattan ruled Thursday that the dispute should be decided by an arbitrator. She said the plaintiffs didn’t dispute that they had entered into an arbitration agreement with the bank. She also said the lawsuit didn’t assert any claims under federal law.

"Dismissal of this action is therefore warranted." -- The judge, in the order.

The Breach. Citigroup announced in June 2011 that the breach affected 1.5% of its card customers in North America.  It was discovered at Citi Account Online during routine monitoring.  Customers’ names, account numbers, and e-mail addresses were viewed, Citigroup said.

The case is Orman v. Citigroup Inc. (C), 11-cv-7086, U.S. D.    [Bloomberg, 9/12/12]