Citigroup Inc.’s Singapore unit sued Hong Kong-based hedge fund manager Raghavendran Rajaraman for $1.03 million in trading losses.
The losses were incurred after gold fell from a record high in September, reports Bloomberg.
Rajaraman had $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 $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 percent in September, and the bank liquidated Rajaraman’s account after it reached a so-called forced sell level and got his authorization.
He hasn’t filed his defense and didn’t return three calls to his mobile-phone. Richard Healy, Rajaraman’s lawyer at Oldham, Li & Nie, declined to comment.
“We intend to pursue the case and it’s inappropriate for us to comment further,” said Citigroup’s Singapore-based spokesman Adam Abdur Rahman.
Citigroup breached its agreement by closing his account without prior notice, according to an Oct. 7 letter from Oldham, Li & Nie to the bank’s lawyers including William Ong at Allen & Gledhill LLP.
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