Ramchandani v. CitiBank National Association

Background

Rohan Ramchandani sued CitiBank National Association, CitiGroup Inc., and Citicorp over one claim for malicious prosecution under New York law. The claim arose from Citi’s disclosures to the Department of Justice during an investigation into alleged price fixing in the foreign-exchange market. Ramchandani had worked as the European head of Citi’s foreign-exchange spot-market trading desk in Citi’s London offices from 2004 to 2013.

Ramchandani alleged that Citi investigated his chatroom communications, suspended and fired him, and then portrayed him to regulators, the press, and the Department of Justice as the employee responsible for criminal wrongdoing. He alleged that Citi mischaracterized the communications and falsely shifted blame to him to limit Citi’s own criminal, regulatory, financial, and reputational exposure. The Department of Justice announced his indictment in January 2017, and he was acquitted after a trial in October 2018.

Motion to Dismiss

The court treated the parties’ pre-motion letters as Citi’s motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint states a legally sufficient claim. At this stage, the court accepted the complaint’s factual allegations as true, drew reasonable inferences for Ramchandani, and assessed whether the claim was plausible—not whether the evidence would ultimately prove it.

Citi argued that the complaint did not plausibly allege three elements of malicious prosecution: that Citi initiated the criminal proceeding, that the charges lacked probable cause, and that Citi acted with malice. Citi maintained that the Department of Justice independently investigated and prosecuted Ramchandani, that his indictment established probable cause, and that Ramchandani had not identified specific false statements or fabricated evidence provided to the Department of Justice.

Ramchandani argued that Citi had directly influenced the prosecution by working closely with the government and supplying information that it knew was false. He also argued that Citi’s alleged effort to make him the sole responsible employee showed both that the prosecution lacked probable cause and that Citi acted with an improper motive.

Court’s Analysis

Under New York law, a malicious-prosecution claim requires allegations that the defendant initiated a proceeding against the plaintiff, acted with malice, lacked probable cause, and caused a proceeding that ended in the plaintiff’s favor. The favorable termination element was not disputed because a jury acquitted Ramchandani.

Initiation of the prosecution. The court held that providing knowingly false information to law-enforcement authorities can satisfy the requirement that a defendant initiated a criminal proceeding. The court found it plausible that Citi gave information about Ramchandani to the Department of Justice. The complaint alleged that Citi told the Financial Conduct Authority that it was uncomfortable with Ramchandani’s conduct, that Citi helped the Department of Justice identify and decode relevant chatroom communications, and that Citi had a motive and opportunity to influence the investigation.

The court acknowledged that whether Citi knowingly made false statements was a close question. But it found the allegations sufficient at the pleading stage. The complaint alleged that Citi told Ramchandani that it had not concluded he had engaged in wrongdoing, paid him severance that allegedly would not have been available for gross misconduct or gross negligence, offered him a job reference, and told him there was no evidence of market manipulation. The complaint also alleged that Citi described its criminal liability as arising from one employee and that Ramchandani’s former supervisor later stated that Citi had identified Ramchandani as its sole rule violator and had facilitated the criminal charges. Taken together, the court found these allegations plausibly suggested that Citi told the Department of Justice Ramchandani had committed wrongdoing while knowing that information was false.

Lack of probable cause. The court recognized that a grand-jury indictment normally creates a presumption of probable cause. That presumption can be rebutted by allegations that the indictment was obtained through fraud, perjury, suppression of evidence, or other bad-faith conduct. The court also rejected Citi’s argument that the earlier denial of Ramchandani’s motion to dismiss the indictment necessarily established probable cause, explaining that dismissal of an indictment is an extraordinary remedy available only in limited circumstances.

The court held that Ramchandani plausibly alleged that Citi’s false, self-serving statements procured the indictment and rebutted the probable-cause presumption at this stage. The court relied in part on the allegation that the Department of Justice needed Citi’s help to decode the chatroom communications and that Citi allegedly used that role to minimize its own liability by shifting blame to Ramchandani.

Malice. The court explained that malice in this context does not require hatred or personal spite. It means that the defendant acted from an improper motive rather than a desire to see justice served. The court found that Ramchandani plausibly alleged such a motive by claiming that Citi falsely presented its criminal liability as limited to the acts of one employee in order to reduce its own exposure and avoid broader consequences.

Disposition

Judge Victor Marrero ordered that the motion to dismiss filed by CitiBank National Association, CitiGroup Inc., and Citicorp was DENIED in its entirety. The ruling allowed Ramchandani’s malicious-prosecution claim to proceed beyond the pleading stage; it did not decide whether the allegations would ultimately be proven.