A Greek steelmaker is suing Citigroup accusing the financial services giant of publishing a “malicious” research note designed to damage the company and boost its own revenues.

In what lawyers believe is the first case of its kind in the UK, Halyvouriko, a private Greek company, alleges that Citigroup published a series of “plainly false” facts in a research note on the Greek steel sector.

The lawsuit claims the research note, published in October 2007, used “flawed methodology” to compare Halyvouriko unfavourably with its main rival Sibenor, a Citigroup client.

It claims that the research note was calculated to cause "pecuniary damage” by understating Halyvouriko’s revenues, market share and growth prospects, painting it as a “failing company”.

The lawsuit says: “The inescapable inference is that [Citigroup] acted in this way because it was motivated by the desire to damage or disparage [Halyvouriko] and thereby increase the likely investment in Sidenor, through which [Citigroup] stood to gain commercial benefit or advantage.”

It further accuses Citigroup’s research analysts of publishing facts “knowing they were false, or recklessly not caring whether they were true or false”.

Halyvouriko is claiming unspecified damages in the lawsuit, which was filed at the High Court in London.

Citigroup said: “We are aware of this claim and considers it without merit. Citi will vigorously defend its position."

Lawyers said that even if Halyvouriko can prove the information was false, it may be difficult to succeed with such a claim because the claimaint would need to convince the court that the research note was malicious.

Such litigation is rare but not unheard of in Europe. LVMH, the French luxury goods group, sued Morgan Stanley claiming its analysts issued biased reports that damaged LVMH while the bank was working for rival Gucci.

A Paris court ordered Morgan Stanley to pay €30 million in compensation but the ruling was reversed on appeal. The case settled on confidential terms in 2007.

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