Either all these problems work themselves out in the next 2 years one way or another. For the worse, this stock goes to zero and the equity gets wiped. For the best, all the crap in Citi Holdings is gone and the bank gets back to nice profits, stock could go to $12.
Wouldn't the better play be to buy Jan 2012 7.50 Calls for around 35 cents? You could control 10,000 shares with onlt $3,500. If the stock goes to $12 you make over 40k plus. The down side is you lose your $3,500.