Tuesday, 23 September 2014
Last updated 1 hour ago
Jan 4 2012 | 11:13am ET
Citigroup has sued a hedge fund manager linked with 3 Degrees Asset Management over a US$1 million shortfall suffered after it liquidated his gold account.
According to the bank, Raghavendran Rajaraman used a US$20 million credit line with the bank to finance his investments in gold just as the precious metal began a precipitous decline. When gold fell by almost US$100 per ounce on Sept. 26, "the margin level under the account deteriorated to the 'forced sell' level deemed by the bank," Citi said.
So the bank sold more than half of Rajaraman's gold, and then the rest under a stop-loss order. It also liquidated another US$1.7 million in gold held as collateral.
Even after the sale, Citi was left with a loss of US$1.03 million, it said. It is seeking that amount plus interest.
Citi's Singapore unit filed the suit in the city-state in November.
Rajaraman has not formally responded to the complaint. But in an October letter to Citi, his lawyers accused Citi of breaching their agreement, leading more than US$2.7 million in losses. Rajaraman's lawyers said that Citi failed to wait 24 hours after the account reached the force-sell level as required.
A preliminary hearing is scheduled for Jan. 27.
Rajaraman, a former Citi currency options trader, works with 3 Degrees, according to the Citi lawsuit. But he is not an employee of the hedge fund, it said.
"There was a plan to launch a fund together, but it never came to fruition," 3 Degrees founder Mohamed Ibrahim told Bloomberg News.
Sep 22 2014 | 4:15pm ET
"I tell people that everybody likes good news and so if you have good performance that’s wonderful,” explains Mike McKitich, CIO of Petty Endowment, “but it’s the people that want to talk about the bad news or where they drifted and how they came back and how they stayed to their discipline…” that he wants to hear from. Read more…
Aug 25 2014 | 11:21am ET
As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…
Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.