Ramchandani Files $112m Lawsuit Against Citi for Malicious Prosecution

Rohan Ramchandani, who was acquitted of FX market manipulation by a jury in New York last year, has filed a lawsuit against his former employer, Citi, alleging “malicious prosecution” by the bank against him and seeking $112 million in damages.

In documents filed at the Southern District of New York Court today, Ramchandani claims that “Citi made knowing and material misstatements to the United States Department of Justice (the “DOJ”), which relied upon those misstatements in obtaining the indictment of Ramchandani for felony violations of the United States antitrust laws without probable cause”.

The court filing alleges that, after firing Ramchandani in January 2014 during an investigation by regulators and law enforcement authorities into supposed instances of malpractice in the FX spot market, Citi “began to leak false, and gravely derogatory, assertions against him, including to government investigators and the press”.

Essentially, the filing claims that Citi identified Ramchandani to the DOJ as a supposed wrongdoer in what was widely referred to in the industry as the FX fixing scandal and helped it “decode” the technical communications that formed much of the grounds for the DOJ’s case against Ramchandani.

Crucially though, the court document says that Citi did this despite knowing that the case being mounted against Ramchandani “was without basis in law or fact”, adding that the bank did this in order to further its own interests.

Ramchandani claims that by limiting the basis of Citi’s guilty plea for FX malpractice to the activity of a single trader working in just one portion of the spot FX market the bank was able to “drastically” limit the regulatory consequences of this guilty plea.

From the court filing: “Among other things, Citi successfully argued to the United States Securities and Exchange Commission (the “SEC”) that, because of the purported fact that its wrongdoing was limited to a single individual, Citi should not be limited in its ability to participate in the United States securities and capital markets.”

Further, Ramchandani alleges that Citi was also able to limit the “potentially catastrophic implications” of this guilty plea in other FX-related civil lawsuits by claiming that any malpractice was the result of the actions by one individual.

And finally, the court document alleges that Citi baselessly blamed Ramchandani for “nonexistent crime” in order to limit scrutiny — and potential charges — against its own senior management and officers.

Now, Ramchandani is claiming in his lawsuit that as a result of this “grave and serious misconduct” by Citi he has suffered “extraordinary damages, including the effective destruction of his previously successful, and highly remunerative, professional career”.

The court document adds: “Ramchandani will never be able to fully rebuild the professional reputation, and the employment and compensation opportunities he lost as a result of Citi’s knowing and malicious misconduct are in the tens of millions of dollars.”

Because of this, Ramchandani is seeking damages of no less that $112 million from Citi.

However, a spokesperson for Citi says: “Mr. Ramchandani’s claims of malicious prosecution are without merit and we will contest them vigorously.”

Ramchandani, meanwhile, comments: “As my claim sets out, I was the fall guy – or, as one of Citi’s defence team put it on the day the bank chose to plead guilty based solely on my conduct, “collateral damage” – in the bank’s deliberate and cynical ploy to ensure its self-preservation.” 

He continues: “Even though I was properly acquitted in court last October, I have been unable to resume a job that I loved, having been unjustly forced out in 2014. Citi should be held to account for the destruction of my professional career and reputation, not to mention the untold impact on my family, who have supported me throughout this ordeal. No one should have to go through an enduring nightmare like this. Employers must 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.”

David Lurie, the attorney representing Ramchandani, comments: “My client seeks to demonstrate that Citi maliciously and deliberately constructed a meritless case against him, in order to limit the imposition of civil, criminal and/or regulatory liability upon the bank. As a result, Rohan has suffered immense financial and reputational damage. It’s now for the court to see that justice is done.”

In February of this year Profit & Loss published an opinion piece by Ramchandani regarding the case made against him by US authorities, The Prosecution That Never Was.

Galen Stops

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