Citi gets additional month to respond to FX Cartel trader complaint
Citi has secured one additional month to prepare its response to the complaint launched by Rohan Ramchandani, ex-European head of its FX Spot Market trading desk.
On March 24, 2021, Judge Victor Marrero of the New York Southern District Court granted a motion by the defendants in this case – CitiGroup Inc., CitiBank National Association, and Citicorp. Thus, the defendants’ time to answer the Complaint is extended from March 25, 2021, until April 23, 2021. The Court will schedule a prehearing conference as necessary thereafter.
Let’s recall that, in February 2021, the Court sided with the “FX Cartel” trader and nixed the Citi attempt to dismiss the lawsuit.
The case alleges one count of malicious prosecution stemming from Citi’s disclosure of information about Ramchandani to the United States Department of Justice (DOJ) in connection with an investigation into a price-fixing conspiracy at Citi.
Around June 2013, rumors began to spread in the press about widespread manipulation of Forex rates. The DOJ and the United Kingdom’s Financial Conduct Authority (FCA) both commenced investigations into the alleged manipulation. Meanwhile, press reports started to make clear that criminal charges against financial institutions participating in the FX Spot Market were imminent.
Ramchandani alleges that in early 2014 Citi began a campaign to use him as a scapegoat in both the press and with government investigators. Ramchandani alleges that during this time, Citi began to contact regulators and the press as part of “a calculated scheme” to deflect the blame for any wrongdoing onto him.
Further, Ramchandani alleges that Citi repeatedly implicated him in communications with regulatory agencies investigating the purported conspiracy. For example, he contends that Citi contacted the FCA on the date of his dismissal, stating Ramchandani was to be fired. Instead of limiting the message in the way it had assured Ramchandani it would, Citi told the FCA that it did “not feel comfortable” with Ramchandani’s conduct after reviewing his chatroom communications.
Given that the DOJ investigation was also ongoing at the time, Ramchandani argues that Citi likely made the same disclosure to the DOJ.
On January 10, 2017, the DOJ announced Ramchandani had been indicted along with two other chatroom participants from other financial institutions. Ramchandani insists that he was indicted because of Citi’s false statements putting him at the center of the case. Ultimately, after trial in October 2018, Ramchandani was acquitted.
Ramchandani initiated this action on October 2, 2019. The lawsuit continues at the New York Southern District Court.