Citi says Alpari (US) was aware of Last Look practices

Maria Nikolova

Citi notes that Alpari (US) was founded by former executives of Currenex – one of the ECNs alleged to have implemented Last Look, and from at least May 2013 Alpari (US) sent Citi monthly statistics showing that it was fully aware that thousands of its trades were rejected each month.

Further to FinanceFeeds’ report about Citigroup Inc (NYSE:C) and other major banks targeted in a “Last Look” case launched by now-defunct Alpari (US), Citi has voiced its intentions to oppose the action brought by the broker.

In a court filing, dated September 5, 2017, Citi notes that it plans to file a motion to dismiss the entire Complaint for, among other things, failure to state a claim.

As an initial matter, Citi considers that the claims of Alpari (US) must be arbitrated. The trading relationship between Citi and the broker was governed by an International Swaps and Derivatives Association, Inc. Master Agreement, which provides for binding arbitration of “any dispute, be it contractual or non-contractual, arising out of or in connection with” the Master Agreement, which in turn governs (inter alia) FX transactions.

Also, Citi argues that the Plaintiff’s allegations about a breach of contract lack identification of any particular contract. The Complaint is dubbed to fail at the threshold because the Plaintiff does not attempt to identify the relevant contractual provisions that allegedly were breached between 2008 to 2016 (the time period addressed in the Complaint).

Citi says that Alpari (US) was on notice of Citi’s Last Look practices at the time it offered to enter into trades with Citi.

“Before it dissolved, Plaintiff was a registered retail FX dealer and futures commission merchant that sourced liquidity from Liquidity Providers like Citi, marked up that liquidity, and then made it available to retail customers over its own ECN”, Citi argues.

Moreover, Citi stresses that Alpari (US) was founded by former executives of Currenex – one of the ECNs that Plaintiff alleges implemented Last Look in May 2003 after Liquidity Providers demanded it. Also, from at least May 2013, Alpari (US) sent Citi monthly statistics showing that “Plaintiff was fully aware that thousands of its trades were rejected each month”.

A court conference on these matters is scheduled for September 12, 2017.

Alpari (US) claims that from January 1, 2008 to June 30, 2016, Citigroup “used Last Look to reject millions of trades that would have been otherwise executed but for Citigroup reneging on its matched orders”.

This is a class action, representing “all persons in the United States who, between January 1, 2008 and June 30, 2016 (the “Class Period”), placed an order either on a Citi proprietary platform or a third party ECN that (1) was matched to Citigroup’s streaming price; (2) was rejected by Citigroup; and (3) was subsequently filled at a price less favorable than the original Citigroup price to which it was matched.”

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