Supreme Court Lets $1B Citigroup Oceanografia Fraud Suit Proceed

On January 12, 2026, the U.S. Supreme Court declined to review Citigroup’s petition, allowing a long-running dispute to proceed in which the bank faces allegations of contributing to over $1 billion in losses tied to Mexico’s collapsed oil services firm, Oceanografia. The decision leaves intact the May 2025 ruling of the 11th U.S. Circuit Court of Appeals, enabling more than 30 claimants, including bondholders, maritime suppliers, and Rabobank, to pursue RICO claims against Citigroup’s Banamex subsidiary for its alleged role in questionable lending practices. Oceanografia, once buoyed by contracts with Pemex, Mexico’s state oil company, unraveled after a 2014 corruption probe and entered insolvency in 2016. Plaintiffs allege Banamex extended $3.3 billion in financing between 2008 and 2014 despite mounting debt and fabricated Pemex approvals, with Citigroup later uncovering $430 million in fraudulent payments that led to SEC scrutiny and a $4.75 million penalty in 2018 for inadequate oversight. The 11th Circuit found the allegations plausible, suggesting Citigroup may have withheld material information while continuing to profit from interest payments, though the bank argued that investors were improperly recasting securities claims as racketeering violations to seek treble damages. With the Supreme Court declining intervention, the broader litigation will now proceed, raising broader questions about the application of racketeering laws to complex cross-border financial misconduct and the compliance expectations placed on global lenders operating in high-risk markets.