Citigroup Inc. (C) won dismissal of a Hong Kong lawsuit by former private banking client Natamon Protpakorn seeking $17.9 million for damages from currency bets liquidated when the bank closed her positions.
Citigroup had “good reason” to be concerned about the sources of Natamon’s wealth, High Court Judge Jonathan Harris said in the judgment delivered today. Such concerns “might reasonably be expected to cause it to wish to close her account,” he said.
Natamon, a Thai national who had previously been a client of UBS AG, first sued Citigroup’s Hong Kong unit in 2005. She claimed the bank had persuaded her to invest in foreign exchange trades in 2001 and then unfairly closed her positions in 2004, according to previous rulings from the eight-year legal battle.
Natamon’s lawyer Christine Tsang said before the verdict was delivered that her client wouldn’t comment. Citigroup’s Hong Kong-based spokesman Richard Tesvich declined to comment.
Citigroup staff became concerned about Natamon’s account when they discovered in 2004 that the Japanese man who directed her trading positions had been convicted of fraud, according to the judgment.
Natamon didn’t take the opportunity in the trial to demonstrate that the bank’s concerns about the ownership of her assets were unjustified, Harris wrote in his 40-page ruling, dismissing her claim.
“Banks are under increasingly onerous regulatory obligations to ensure that they are not used as conduits for improper financial dealings,” Harris said.
The case is Natamon Protpakorn v. Citibank N.A., HCCL5/2011 in Hong Kong’s Court of First Instance.
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