Currencies trader sues Citi over ‘malicious’ prosecution

A former Citigroup currencies trader is suing the bank for at least $112 million, alleging that the bank "framed" him to protect itself in the throes of a market manipulation scandal that eventually led to him facing the possibility of a decade in jail.

In a case with potentially profound implications for the way banks and regulators treat individuals connected to allegations of industry-wide wrongdoing, Rohan Ramchandani claims in a suit filed in New York on Wednesday that the bank singled him out for intense scrutiny from UK and US regulators in a "secret scheme" to "dirty up" his name.

The bank "knowingly" encouraged the US Department of Justice to pursue an antitrust case against him "without probable cause" in an effort to shield itself from greater damage, Mr Ramchandani claims, adding that his previous boss and one of the bank's lawyers had repeatedly asserted he had done nothing wrong. Mr Ramchandani was acquitted at trial over the matter in late 2018, three years after Citi reached a $1.3 billion settlement with the DoJ and the Federal Reserve.

“Employers should not be allowed to throw innocent employees under the bus, nor to play judge, jury and executioner, in an attempt to limit their corporate liability,” Mr Ramchandani said in a statement.

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The bank said the claims are “without merit”. It said it would contest them vigorously.

The 39-year-old's case relates to a currency-trading scandal that erupted in 2013, and which hinged on claims that traders were colluding to move exchange rates in their own favour around the time that daily benchmark rates are calculated. At the time, Mr Ramchandani was the European head of the currencies trading desk at Citi – a heavyweight bank in this market.

Mr Ramchandani, a Briton based in London, became a focus for regulators and for the press in part because he was a member of an informal electronic chatroom with several traders at other banks that at times was jokingly referred to as the “Cartel”. He was suspended in October 2013 and dismissed in January the following year.

In late 2014 and the spring of 2015, the bank settled with regulators in Britain and US, paying a total of over $2 billion in fines. That process culminated in Mr Ramchandani, along with two other members of the “Cartel” facing a criminal trial for antitrust violations in the US. The British trio were swiftly acquitted, sparing them from 10 years in a US prison.

Mr Ramchandani’s grievance is that, among the hundreds of currency traders across London, and the dozens in developed-market currencies that Citi fired, it was his chatroom communications alone that formed the basis of the bank’s UK and US settlements. This, he says, reflects an effort by Citi to sully his reputation, putting him under undue legal scrutiny in addition to scuppering what was once a high-flying career.

He says he has been unable to work in financial services since his dismissal, despite his acquittal.

“Citi quite literally fabricated an antitrust case for the DoJ against Ramchandani based upon knowingly false allegations that he engaged in market manipulation and collusion,” the suit reads.

By limiting the basis for its own guilty plea just to Mr Ramchandani’s activities, the bank avoided class-action lawsuits and protected its ability to participate in crucial US markets, the suit alleges.

A lawyer for Citi described him as "collateral damage" in this exercise, the suit adds, while the bank's press office "transparently calculated to encourage negative leaks" about him, the case states. Mr Ramchandani's former boss Jeff Feig, who has since left the bank, wrote to him during his trial to say he was "shocked and appalled" he was indicted. Mr Feig said at the time he was "praying the jury sees your innocence as clearly as I do", the suit claims.

The case raises questions over how regulators come to understand the details of how allegedly improper trading schemes work. As was also seen in the Libor manipulation scandal that preceded the FX probes, regulators depend on banks to decode the jargon and jocular tone used when traders communicate with each other.

"My client seeks to demonstrate that Citi maliciously and deliberately constructed a meritless case against him," said David Lurie, Mr Ramchandani's Brooklyn-based attorney.

In January this year, Citi conceded that it had failed to follow due process for Mr Ramchandani’s dismissal. A separate UK employment tribunal hearing is due later this year. – Copyright The Financial Times Limited 2019