Citigroup’s Singapore unit is suing Hong Kong-based hedge fund manager Raghavendran Rajaraman, seeking to recoup US$1.03 million (S$1.3 million) in trading losses the bank says he incurred after gold fell from a record high in September.
Mr Rajaraman had US$19.2 million worth of gold in his account on Sept 23 which the bank sold, along with other collateral, on Sept 26 “in the face of a rapidly deteriorating market”, leaving a US$1 million shortfall, according to a Nov 18 lawsuit filed with the Singapore High Court. The first closed hearing is scheduled for Jan 27.
Gold plunged 11 per cent in September, the most since October 2008, after futures reached a record US$1,923.70 an ounce on Sept 6. The bank liquidated Mr Rajaraman’s account after it reached a so-called forced sell level and received his authorisation, according to court papers.
Mr Rajaraman’s lawyers, in a letter to Citigroup’s lawyers, said the bank was in “breach” of its trading agreement as it closed the account less than 24 hours after forced-sell without informing the client. The letter also had a formal demand for US$1.7 million in “client losses” from Citigroup, alleging the bank failed to manage the account properly.
Mr Rajaraman – a fund manager with 3 Degrees Asset Management, according to the documents filed in court – has not filed a defence. He was not available for comment.
A Citigroup spokesperson said the bank intends to pursue the case further but declined further comment.
Source: Todayonline
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