Citi seeks dismissal of complaint brought by FX “Cartel” trader
Citigroup Inc., Citicorp, and Citibank, N.A. on December 9, 2022 filed a motion for summary judgment in a lawsuit brought by former FX trader Rohan Ramchandani. In a set of documents submitted at the New York Southern District Court, Citi seeks to secure the dismissal of the plaintiff’s complaint.
Ramchandani, who was acquitted of charges relating to manipulation of Forex rates in 2018, is accusing Citi of using him as a scapegoat in order to avoid its responsibility. In February 2021, the Court sided with the “FX Cartel” trader and nixed the Citi attempt to dismiss the lawsuit brought by Ramchandani.
Let’s recall that, in January 2017, the United States Department of Justice (DOJ) obtained a grand jury indictment of Ramchandani and two other traders employed at multiple banks including JP Morgan, Barclays, and the Royal Bank of Scotland. The indictment charged the three traders with participating in a conspiracy to suppress and eliminate competition for the purchase and sale of the Euro/U.S. Dollar currency pair in violation of Section 1 of the Sherman Act (15 U.S.C. § 1).
The DOJ’s investigation of the banks and their traders began in 2013 amid press reports on potential manipulation in the FX market in chatrooms that were sometimes referred to as the “Cartel,” the “Bandits Club,” the “Dream Team,” and the “Mafia” and involved an antitrust leniency applicant, UBS, that represented to the DOJ that the Traders entered into a conspiracy to engage in anti-competitive conduct.
The DOJ conducted a four-year investigation of the FX market, that included the cooperation of a member of the traders’ chatroom who worked at UBS, the DOJ’s analysis of trading records, expert analysis of trading data, as well as the traders’ chatroom communications.
Based upon the evidence collected by the DOJ, including from UBS and its cooperating trader, and Ramchandani’s participation in the chatrooms at issue, Citi pleaded guilty to one count of a conspiracy to violate the Sherman Act, which included Citi paying a fine of $925 million. Each of the other banks that employed a trader—JPMorgan, the Royal Bank of Scotland, and Barclays—similarly pleaded guilty to conspiring to violate the Sherman Act.
After obtaining the indictment of the traders, the DOJ prosecuted and tried Ramchandani and the two other traders before a jury in the Southern District of New York in October 2018. The Traders were each acquitted.
Ramchandani has brought an action, alleging that the DOJ prosecution resulted not from his own conduct, but from Citi’s initiation of his prosecution, based on alleged unspecified “fabricated” evidence it provided to the DOJ.
Now, Citi is trying to rebuff the trader’s claims. According to the motion for summary judgment submitted on December 9, 2022 at the Court, Ramchandani’s malicious prosecution claim is based on misstatements of fact and omissions, and it ignores the well-established Second Circuit requirement that a plaintiff prove fraud, perjury, or other misconduct in the grand jury in order to overcome the presumption of probable cause established by an indictment.
First, Citi says, the plaintiff has entirely failed to rebut the presumption of probable cause established by the grand jury indictment. In January 2017, the DOJ obtained an indictment from a Southern District of New York grand jury against Ramchandani, and two other traders at competing banks, for an alleged conspiracy in the Euro/U.S. Dollar currency market in violation of the Sherman Act. The Indictment was based on the traders’ “chats” in a chatroom they referred to as the “Cartel,” the “Mafia,” and the “Bandit’s Club”.
Second, according to Citi, there is no factual basis for the allegation that Citi “initiated” Ramchandani’s prosecution by the DOJ. For a civilian defendant (i.e. a non-law enforcement defendant like Citi) to initiate a criminal prosecution, it must affirmatively induce the prosecution to the point where the prosecution is no longer acting of its own volition.
Third, Citi says, the facts are that Citi did not act with malice towards Ramchandani and did not “scapegoat” him to reduce its own liability.
Citi notes that, in a United Kingdom employment proceeding that Ramchandani commenced against Citi, the UK Tribunal specifically found that Ramchandani had breached his obligations to Citi by engaging in his Chatroom conduct, that Citi had a valid basis for dismissing him based on his conduct, and that Citi did not make him a scapegoat in ongoing regulatory investigations.
Citi notes that the record conclusively establishes Plaintiff’s failure to rebut the presumption of probable cause established by the Grand Jury Indictment, which alone compels dismissal. The record also confirms that there are no material facts in dispute by which Plaintiff could prove that Citi initiated the DOJ’s prosecution of him or that Citi acted with malice.
The defendant concludes that summary judgment dismissing the Complaint should be granted.