NEW YORK, Nov 18 (Reuters) - A Connecticut firm founded by two former Goldman Sachs partners owes Citigroup Inc damages in a $25 million lawsuit by the bank over losses incurred during an unexpected surge in the Swiss franc in January, a U.S. judge ruled. U.S. District Judge Paul Oetken in Manhattan on Tuesday ruled that Tormar Associates LLC had breached its contracts with Citigroup by not paying the amount of collateral it owed following a major loss betting the wrong way on the Swiss franc. The judge rejected arguments by Tormar that Citigroup had breached its brokerage contracts by forcing the Stamford, Connecticut-based firm to liquidate its portfolio under duress. “Tormar has not pleaded facts sufficient to support its allegation of duress,” Oetken wrote. The judge directed Citigroup and Tormar to try to reach an agreement on how much damages he should award the bank by Dec. 23. A Citigroup spokeswoman said the bank was pleased with the ruling. Representatives for Tormar did not respond to requests for comment on Wednesday. The case stemmed from the January decision by the Swiss central bank to change its policy and allow the franc to trade freely against the euro. The franc soared as much as 38 percent against the dollar following that unexpected move, hurting brokers and clients that were positioned incorrectly. Tormar Associates is the joint family office of Ron Marks and partner John Tormondsen, both of whom previously worked at Goldman Sachs before joining hedge funds and later founding the firm in 2003. In a lawsuit filed in March, Citigroup said that on Jan. 15, when the Swiss central bank made its announcement, Tormar had been betting the Swiss franc would fall against other currencies. Citigroup said the franc’s surge triggered an obligation by Tormar to post $29 million in additional capital, which it said it could not do. Tormar instead unwound its position, owing ultimately $35 million, minus $10 million in collateral it previously posted, Citigroup said. The case is Citibank, N.A., v. Tormar, U.S. District Court, Southern District of New York, 15-01932. (Reporting by Nate Raymond in New York; Editing by Tom Brown)
Citigroup has won $$29 millionm in damages in a lawsuit against Tomar Associates LLC, a firm founded by two former Goldman Sachs partners; the bank accused Tomar of breaching its contracts by not paying the amount of collateral it owed, following a huge loss betting the wrong way on the Swiss franc. Citigroup and Tormar have until 23rd December to reach an agreement on how the damages should be awarded.