Citigroup Singapore has filed charges against a Hong Kong-based hedge fund manager for allegedly incurring $1.03 million in gold trading losses in September 2011, reports show.
Raghavendran Rajaraman reportedly had $19.2 million worth of gold in his account on 23 September, which Citigroup sold in 26 September amid a market decline. According to an 18 November filing with the Singapore High Court, the move had left a $1 million shortfall.
Rajaraman, who has yet to respond to the charges, works with 3 Degrees Asset Management, a hedge fund in Singapore, and served as a currency options trader with Citigroup in Singapore until 2007. In September 2011, gold values dropped 11 per cent, prompting the bank to seek authorisation to liquidate his account upon reaching a so-called force-sell level. Rajaraman reportedly agreed.
Contrarily, Rajaraman's lawyer Oldham, Li & Nie had said in an 7 October letter that the bank breached its agreement by closing the account without prior notice, thereby leading their client to suffer a $1.7 million loss. A further $1.03 million loss was also incurred on the premature liquidation of the account, instead of the usual 24-hour wait after an account reaches force-sell level.
The case is ongoing in the Singapore High Court.