Vindicated ‘FX Cartel’ Trader Accuses Citi Of Trying To “Frame” Him, Sues For $112 Million

Six years after prosecutors in New York and London cracked down on Citigroup, JPM, Deutsche Bank and a handful of others in the so-called foreign exchange “cartel” case – the sequel to the persecution of banks for rigging benchmark interest rates (most notably Libor) to benefit their own positions – one of the traders who just barely escaped a lengthy jail term for his alleged role in the plot is fighting back against the bank he said spread lies about him and deliberately tried to “frame” him.

In yet another market manipulation case that could have “potentially profound implications for the way banks and regulators treat individuals connected to allegations of industry-wide wrongdoing”, the former head of Citigroup’s European FX trading desk is suing his former employer for throwing him under the bus, the FT reports. 

Rohan Ramchandani

The trader, Rohan Ramchandani, claimed in a civil suit filed in New York on Wednesday that Citi “singled him out” for “intense scrutiny” from US and UK regulators. Ramchandani’s lawyers described the alleged plot as a “secret scheme” to “dirty up” their client’s name.

After accusing Citi of using him as a human shield to absorb scrutiny as the scandal unfurled, Ramchandani’s legal team said their client is seeking ~$112 million in damages. Even though he was acquitted in a criminal trial that wrapped up late last year (three years after Citi reached a $1.3 billion settlement with the DoJ and the Fed over the allegations), Ramchandani says he has struggled to find another job in finance.

“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,” Ramchandani said in a statement to the FT.

Later, the lawsuit reads:

“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.”

In response, the bank dismissed Ramchandani’s claims as being “without merit,” and vowed to “contest them vigorously.”

If Ramchandani had been convicted, he would have spent more than a decade in prison. Fortunately for him, he didn’t pursue a plea deal and was correct in his conviction that he would be acquitted (which he was).

In his lawsuit, Ramchandani describes how Citi “knowingly” pushed the DoJ to pursue a criminal case against him, even “without probable cause” in a bid by the bank to shield itself from prosecution. Moreover, a former lawyer for Citi and Ramchandani’s boss both claimed that he had done nothing wrong. The lawyer even described him as “collateral damage”.

What’s worse, Citi’s press office was also involved in a smear campaign against Ramchandani, coordinating “negative leaks” about him to try and deflect scrutiny away from Citi. Ramchandani’s former boss Jeff Feig, who has since left the bank, wrote to him during the trial to say he was “shocked and appalled” by the whole affair. Feig added that he was “praying the jury sees your innocence.”

Ramchandani was indicted in early 2017 alongside a former Barclays trader and a former JPM trader. All three men were indicted over their involvement in the ‘cartel’ case, and a New York grand jury approved all three indictments, despite the fact that all three men had been living and working in London for most of their careers. The three traders all voluntarily surrendered to American authorities.

At the time, authorities claimed the three men used an online chatroom dubbed “the Cartel” to coordinate their market manipulation. The scandal had erupted four years earlier in 2013; the three traders weren’t the first to be arrested, and Citi used the complaint against Ramchandani as the basis for its own guilty plea. Most of the traders later claimed that the chatroom was dubbed “the Cartel” in jest.

by the spring of 2015, Citigroup had reached a settlement with regulators in the UK and US: The bank agreed to pay a total of more than $2 billion in fines. It also joined four other major banks in submitting to a parent-level guilty plea.

But by basing its admissions of guilt on Ramchandani’s alleged wrongdoings, Citi managed to avoid a class-action lawsuit and protect its ability to continue participating in US markets.

Which means: Whatever amount the bank must expend settling Ramchandani’s claims will have been worth it, seeing as the alternative – that is, not using him as a pariah during the ‘cartel’ case – could have resulted in serious repercussion.