Citigroup has filed a lawsuit in New York against Wachovia and Wells Fargo as it continues its fight to purchase Wachovia’s assets. Citigroup has asked for $20 billion in compensation and $40 billion in punitive damages. Yeah, right.

More info: Yahoo Finance

The feds have taken the reins in the sale of Wachovia to either Wells Fargo or Citigroup. Citi initially had a preliminary deal to buy Wachovia, but Wells Fargo punked them by announcing that it had reached an agreement to buy Wachovia without government aid.

Citigroup struck back in the courts, and initially won the right to negotiate for longer; this ruling was overturned today in a wind-sprint Court session.

Now the U.S. Federal Reserve is trying to broker a compromise between the companies and hopes that each will settle for a piece of the shattered Wachovia.