'Hedge Fund Manager' Countersues Citi Over Forced Gold Sale

Apr 19 2012 | 11:02am ET

It seems there isn't much at all that Citigroup and Raghavendran Rajaraman agree upon.

Rajaraman has countersued the bank, which sued him in November. At issue is Rajaraman's trading account with the bank and its decision in September to liquidate it, seize his collateral and close the account.

According to Citi, it lost US$1.03 million when it sold off Rajaraman's gold investments in September. The bank claims it did so after gold fell by almost US$100 per ounce and "the margin level under the account deteriorated to the 'forced sell' level deemed by the bank."

Rajaraman sees it a little differently. In his lawsuit, he accused Citi of violating their agreement by failing to give Rajaraman time to "regularize" his account. And in doing so, Citi "entirely caused" the losses—both its own, and the unspecified losses that Rajaraman is seeking in the case.

In October, Rajaraman's lawyers put his losses at more than US$2.7 million.

In response to Rajaraman's countersuit, Citi said he applied to increase his credit line of his "own volition and on his own judgment," even if Citi only gave him US$20 million of the US$50 million he sought. What's more, the disclosure form Rajaraman signed is not the contract that he claims, the bank said.

The two sides can't even agree precisely on who Rajaraman is: Citi, in its lawsuit, called him a hedge fund manager linked to 3 Degrees Asset Management in Singapore; Rajaraman said he was not with 3 Degrees, but did not offer his current employment details in the court filing.


In Depth

Q&A: Brevan Howard’s Charlotte Valeur Talks Strategy

Sep 18 2014 | 11:18am ET

Charlotte Valeur chairs the board of Brevan Howard Credit Catalysts, an LSE listed...

Lifestyle

Hedgies Rock Out For Children's Charity

Sep 15 2014 | 8:40am ET

It's that time of year again—when hedgies trade in their spreadsheets for guitars...

Guest Contributor

Volkered: How Financial Sector Reforms are Creating Opportunities for Hedge Funds

Sep 16 2014 | 11:28am ET

New regulations have dramatically curtailed proprietary trading activity in investment...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    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…

 

Futures Magazine

September 2014 Cover

The London Whale: Rogue risk management

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.