Citi sued by Abu Dhabi fund

As if Citigroup (C) didn't have enough problems: It is being sued by the Abu Dhabi Investment Authority after the sovereign wealth fund invested $7.5 billion in the bank two years ago, when the stock was trading around the $30 a share. The fund looks set to suffer some massive losses, when the equity units it bought start converting to common shares.

Obviously, this was a horrible investment. But not all sovereign funds have lost on their Citi shares. The Kuwait Investment Authority, for example, sold its stake for $4.1 billion after converting preferred shares into common shares. That gives it a nice gain on its $3 billion investment in the bank, which it made in January 2008. It's unclear if the dilutive effects of the recent mass conversion of preferred shares into common shares played a role in the Abu Dhabi suit. My sense is that the losses would have been huge in any case. 

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