Citigroup is being sued by Colorado-based Sungate Securities, an investor in Terra Firma, over allegations the bank hid conflicts of interest during the sale of EMI, according to Bloomberg.

This is the second lawsuit surrounding Terra Firma’s 4 billion-pound ($6.3 billion) acquisition of EMI in 2007.

Sungate, which has only $2 million invested in Terra Firma, filed suit in New York. Sungate, a limited partnership, invested in a feeder fund that was a limited partner of the Terra Firma fund that bought EMI.

Citi units acted as the fund’s general partner and administrator. Citi was an EMI creditor and also financed its acquisition by Terra Firma. Thus, according to the complaint, Citi shifted EMI’s risks to Sungate and the other limited partners in the feeder fund.

Citi holds about 2.5 billion pounds of Terra Firma debt related to the acquisition.

Terra Firma itself has sued Citibank, claiming it misrepresented facts about the auction and lead Terra Firma to believe there was another bidder. As a result, Terra Firma claims in the lawsuit, it paid a “fraudulently inflated price.”

Terra Firma’s lawsuit with Citigroup is already underway. Yesterday in New York, a U.S. judge said he would rule by the end of March whether or not to grant Citigroup’s request to move its trial with Terra Firma to London.