The after effect of the SNB debacle seems like a never ending story. Two Traders; Ron Marks and John Tormondsen have been sued by Citibank for $25 Million over SNB Flash Crash Losses.
Although, this case comes in a different pattern from the usual case in the retail FX trading world, since most retail FX companies had decided to forgive negative balances caused by the CHF crises. Nevertheless, the big-dogs like Citibank have decided to go after traders who did not have enough collateral at margin call, as the banks sues hedge-fund over SNB negatives. An influence factor for the large bank to take this decision, might have to do with the fact that Citigroup is nearing a $800 million settlement for FX manipulation, according to yesterday's announcement.
Last week on Friday, Citigroup Inc filled a $25 million lawsuit in Manhattan federal court against a hedge fund company founded by two ex Goldman Sachs partners. The reason for this is because of their failure to cover a negative balance caused by the SNB crisis. Citigroup Inc accused Tormar Associates LLC of breach of contract, as they failed to pay the amount of collateral, which the hedge fund needs in order to bring its balance to zero after a margin call.
Tormar Associates LLC was formed by Ron Marks, who headed the European government bond. Furthermore, he was in charge of interest rate swap trading at Goldman Sachs in London in partnership with John Tormondsen. He, who headed government bond and also was in charge of interest rate swap trading for Goldman Sachs in New York.
Ron Marks stated on wednessday that Citibank claims are inaccurate, and in return they have accused Citi for breaching contracts. He also made it clear that they intend to defend themselves vigorously against the lawsuit and hold Citibank accountable for its improper conduct, as Marks accused Citi of shifting blame on accused Tormar Associates LLC for Citi self inflicted losses.
