Milbank has once again successfully represented Citibank, N.A. (“Citibank”) and its affiliates in a lawsuit alleging fraud in connection with foreign currency exchange trade. This latest suit, which was brought by six Korean businesses, was dismissed in its entirety by US District Judge Jed S. Rakoff in New York on November 7, 2016.
In their 2,300-paragraph complaint, Sejin Precision Industry Co. Ltd., Mtekvision Co. Ltd., Sungjin Textile Industry Co. Ltd., Samhwan Steel Co. Ltd., Techno Electronics Co. Ltd. and Il Shin Spinning Co. Ltd. asserted 102 separate claims for relief against Citibank and related entities, including claims for fraud, unjust enrichment and breach of fiduciary duty. Plaintiffs alleged that Citibank’s Korean subsidiary of inducing them to enter into allegedly risky currency derivatives known as “knock-in knock-out” or “KIKO” contracts which the Korean affiliate marketed as hedges against fluctuations in the exchange rate between the US dollar and the Korean won. Plaintiffs claimed over $40 million in losses.
Earlier this year, Milbank successfully represented Citibank and certain affiliates in a related action brought by another Korean exporter, Simmtech Ltd. (“Simmtech”), which also asserted claims arising from over a dozen “KIKO” trades. Simmtech claims $73 million in alleged damages. But on August 3, 2016, US District Judge Katherine B. Forrest dismissed Simmtech’s Second Amended Complaint with prejudice. Milbank won dismissal of that action on the grounds of res judicata and collateral estoppel (arising from a decision rendered by a Korean court), statute of limitations, and failure to state a claim.
Milbank’s team is led by Litigation partners Scott Edelman, Daniel Perry and Jed Schwartz, along with Litigation associates Taryn Gallup and Daniel Kaplan.
