KATHERINE B. FORREST, District Judge.
Plaintiff Simmtech, a Korean company, brings this action against defendants (collectively, "Citigroup"), corporate entities comprising a large international banking institution, alleging,
Simmtech is an exporter who receives payment in U.S. Dollars and must convert those payments into Korean Won. In this action, Simmtech alleges that in the period leading up to 2006, it became concerned about the risk of the U.S. Dollar depreciating against the Korean Won. It alleges that defendants, acting through CKI, induced plaintiff to enter into risky options contracts that did not in fact provide an appropriate hedge against the risk of U.S. Dollar depreciation and instead exposed plaintiff to more risk. Plaintiff alleges that it sustained over $73 million dollars in losses between 2008 and 2011. In 2013, it brought three suits: one in Korea in the Seoul Central Court against CKI, one antitrust action in the Southern District of New York against Citigroup Inc., Citibank N.A. and Citibank Korea, Inc., and the instant action.
Before this Court is defendants' motion to dismiss on the grounds of res judicata and collateral estoppel, statute of limitations, and failure to state a claim. For the reasons set for the below, that motion is GRANTED.
Simmtech Co., Ltd. ("Simmtech" or "plaintiff") is a Korean exporting company. (SAC ¶ 75, 360.) Simmtech receives payment for goods it sells in U.S. dollars (USD) and must then convert them to Korean won (KRW). (SAC ¶¶ 191-194; 361.) Embedded in its transactions are costs and the risk of loss due to fluctuations in the USD-KRW exchange rate. (
Simmtech had previously used currency forwards as a risk hedging strategy. (SAC ¶¶ 194, 374.) Under the forward contracts, Simmtech agreed to sell at a specific time in the future at a set rate (the "strike price") a set quantity of USD in exchange for a set quantity of KRW. (
In 2004, the KRW began to steadily appreciate in value against the USD. (SAC ¶ 195.) A variety of new financial products became available to allow exporters to set a higher strike price than the forward contracts would allow. (
In January 2006, Simmtech representatives met with a manager in CKI's foreign exchange sales department; at the meeting, CKI discussed a financial product referred to as a "catapult," designed to limit the impact of KRW/USD volatility. Over the following the two months, CKI and Simmtech continued their discussions. (SAC ¶ 3.) CKI provided forecasts via reports and emails to Simmtech that the KRW would appreciate significantly against the USD in 2006. (SAC ¶¶ 393-401, 406-410, 665.) These forecasts continued throughout 2006 and 2007. (SAC ¶¶ 736-752.) Simmtech alleges that at least as of 2007, defendants did not actually believe that the KRW would appreciate against the USD for the next three years, but rather believed the opposite. (SAC ¶¶ 736-742.)
Simmtech alleges that it trusted CKI's forecasts because it was associated with a large bank, Citigroup. (SAC ¶¶ 9, 131, 135-137, 142-43.) It knew that CKI was a part of a group of related Citigroup affiliates, and many of the investor relations documents bore the Citigroup logo. (SAC ¶¶ 135-137, 142-43.) Simmtech therefore believed that it was communicating with "Citigroup." (SAC ¶ 307.) Moreover, Simmtech alleges that although its employees had limited command of English, a large percentage of the documents CKI sent to Simmtech were in English. (SAC ¶¶ 23, 216, 273, 274, 277-283, 291.)
In February 2006, Simmtech decided entered into a series of transactions with Citibank Korea Inc. ("CKI"), to purchase a product described to Simmtech as a currency "hedge." (SAC ¶¶3, 8, 51, 56, 80, 386.) The product at issue is referred to as a KIKO ("knock-in, knock-out"): it allowed Simmtech to purchase a set quantity of KRW on a fixed date for a fixed quantity of USD,
CKI and Simmtech entered into their first transaction on March 24, 2006, as evidenced by the FX Confirmation, a document that listed what options were being traded between the parties. (SAC ¶ 703.) In total, the two entities entered into 15 FX Confirmations between March 2006 and April 2008. (SAC ¶¶ 704-05.)
As a part of the KIKO agreement, Simmtech not only purchased a group of options from CKI, but it also sold another group of options to CKI. (SAC ¶ 218.) Therefore, CKI was also taking a position in the currency market by purchasing options from Simmtech. (SAC ¶¶ 496-98.) CKI had an option to exercise a call option in the event the KRW depreciated substantially against the USD, reaching a certain "knock-in" price. (SAC ¶¶ 496-98.) CKI's option did not have a "knock-out" price, which meant that its gains were not capped. (SAC ¶¶ 521-23.) The transaction was also structured such that the option held by CKI allowed CKI to purchase "twice as many US dollars as the number of US dollars that Simmtech's option allowed Simmtech to sell." (SAC ¶¶ 243 519.) Simmtech alleges that this "2:1 discrepancy" constituted significant risk that Simmtech would "encounter . . . catastrophic loss." (SAC ¶¶ 243-45, 521, 524.)
The KIKO contracts that Simmtech purchased had three-year terms. (SAC ¶ 536.) According to Simmtech, it did not understand that the longer term meant greater exposure to currency market risk and was unsuitable for its three-month lag time between order and payment. (SAC ¶¶ 33-36, 229-31, 234, 538-39.) A three-year contract versus a shorter-term contract meant that Simmtech had higher probability of experiencing both: 1) a "knock out" event—i.e., the KRW appreciating very significantly against the USD—which would cause Simmtech to lose the benefits of its options, and 2) a "knock in" event—i.e., the KRW depreciating very significantly against the USD—which would cause CKI to gain the ability to exercise its option to buy USD from Simmtech. (SAC ¶¶ 229-31, 538-39.) A representative of CKI told a representative of Simmtech that a long term contract would allow Simmtech to have a higher strike price for its options and convinced Simmtech to choose the three-year contract. (SAC ¶¶ 546-48.)
Moreover, Simmtech alleges that defendants wanted CKI to sell KIKOs to Simmtech in order to generate profits for the parent company, Citibank N.A. (SAC ¶ 530-533.) Simmtech alleges that defendants and CKI knew that export companies like Simmtech would not understand the risks that the KIKO posed. (
Simmtech alleges that it did not know until February 2013 that defendants directly benefitted from the transactions at issue. (SAC ¶¶ 71, 455-56.) According to Simmtech, CKI also engaged in "reverse transactions" with Citibank N.A. whereby CKI transferred any profits to Citibank N.A. (SAC ¶¶ 297, 509.) The Second Amended Complaint does not specify what precise "mirroring" transactions CKI and Citibank N.A. engaged in, but stated that Citibank N.A. "realized substantial profit" from these transactions. (SAC ¶¶ 65, 509.) This allegedly resulted in CKI not profiting from the transactions, but Citibank N.A. gaining "dollar for dollar" what Simmtech lost. (SAC ¶¶ 18-19, 53, 65.) Simmtech also alleges that defendants "designed" the KIKO products in New York. (SAC ¶ 269.)
Simmtech further alleges that the KIKOs were marketed as "zero cost" instruments. (SAC ¶¶ 20, 207-08, 253.) CKI told Simmtech that this zero-cost feature was because Simmtech's "nominal premium" for its options would be offset by CKI's "nominal premium" for its own options, but that, in reality, the premium that Simmtech paid were higher than those that CKI paid. (SAC ¶¶ 254-56.) Simmtech alleges that it was induced to enter into the KIKO agreement based on the understanding that they were on net zero-cost. (SAC ¶¶ 662-65.)
Finally, Simmtech alleges that it entered into the KIKO transactions on the understanding that it could terminate or restructure the agreements. (SAC ¶ 668.) Indeed, the February 2006 agreement provided that it would govern all future transactions. (SAC ¶¶ 467-70, 476.) It also provided that Simmtech could terminate or amend the individual transactions with CKI's consent. (SAC ¶ 471.) This was preceded by email communications between CKI and Simmtech in which CKI's representative stated that termination or restructuring could occur once one year out of the three-year contract elapsed—in particular, if the KRW appreciated, the strike price could be lowered, and if the KRW depreciated, the contract could be extended for another three years. (SAC ¶ 461.) Simmtech alleges that this constituted a side agreement. (SAC ¶ 575.)
Each FX Confirmation, however, contained a provision contradicting the termination/modification clause in the February 2006 Agreement. (SAC ¶¶ 577, 605.) The FX Confirmations stated the transaction was exclusively governed by the terms contained within itself and an ISDA (International Swaps and Derivatives Association, Inc.) agreement. (SAC ¶¶ 580-587.) Simmtech alleges that it did not know that the FX Confirmations had this effect because they were in English. (SAC ¶¶ 588.)
Simmtech also alleges that—independently of selling KIKOs—defendants also manipulated currency exchange rates during the relevant time period. (SAC ¶¶ 900-01.) According to Simmtech, defendants manipulated the WM/Reuters benchmark rate, which is used by foreign exchange traders all around the world to price currency swaps such as the KIKO. (SAC ¶¶ 896, 905-06.) The manipulation affected the price of the KRW and was, of course, not disclosed to Simmtech. (SAC 901-02.) Simmtech alleges that if it had known that defendants were manipulating exchange rates, it would not have entered into the KIKO transaction. (SAC ¶¶ 904, 909.) However, the Second Amended Complaint does not state how the alleged manipulation affected the KRW valuation. In other words, it does not state whether the manipulation led to a higher or lower valuation of the KRW against the USD.
By December 2008, Simmtech began to experience substantial losses on the KIKOs. (SAC ¶¶ 454, 819.)
In December 2008, Simmtech entered into discussions with CKI to restructure the KIKO agreements. (SAC ¶ 820.) During these discussions (which allegedly occurred sixteen times between December 2008 and early 2009), CKI told Simmtech that it had to obtain authorization from the New York defendants. (SAC ¶¶ 821-22.) In early 2009, CKI informed Simmtech that restructuring was not possible. (SAC ¶¶ 823-24, 827.) Instead, CKI—allegedly working under defendants' instruction—told Simmtech that it could provide a loan for Simmtech to cover its losses. (SAC ¶¶ 828-29.) On March 25, 2009, Simmtech received a loan from CKI in the amount of KRW 42 billion, with an interest of approximately KRW 7 billion. (SAC ¶¶ 830-32.)
By March 2011, Simmtech had sustained over $73 million dollars in losses on the KIKOs. (SAC ¶¶ 834-35.) It had paid off the entirety of the losses as well as its loan. (SAC ¶¶ 835.)
Simmtech has already sued CKI for misconduct in Korea regarding similar events. It filed suit against CKI on December 28, 2012 (the "Korean action"). (SAC ¶ 348.) On October 2, 2014, the Seoul Central District Court issued a written order entering judgment in favor of CKI on all of Simmtech's claims. After considering the parties' submissions, making factual findings, and reviewing the relevant law, the Korean trial court determined that the relief sought against CKI was "unfounded." (Kaplan Decl. Ex. 3, at 36.)
Simmtech also initiated litigation against defendants and other banks in a separate action in the Southern District of New York on November 7, 2013 (the "SDNY FX Action").
On January 28, 2015, Simmtech's claims were dismissed. The court ruled that Simmtech's Sherman Act claims must be dismissed because the allegations implicated "exclusively foreign activity that does not sufficiently affect American commerce," and therefore is barred under the Foreign Trade Antitrust Improvements Act ("FTAIA").
This action was originally filed in state court on July 22, 2013. It was removed to this Court on September 25, 2013. (ECF No. 1.) Plaintiff filed an amended complaint on December 10, 2013 (ECF No. 23) and a Second Amended Complaint ("SAC") on November 21, 2014 (ECF No. 73).
The defendants in this action are CKI's corporate affiliates in the United States. In essence, the claims in the SAC are based on the theory that, in selling KIKOs to Simmtech, CKI acted as defendants' agent. In the SAC, Simmtech brings ten claims related to the KIKO transactions themselves, consisting of fraud in the inducement, fraud, negligence, breach of fiduciary duty, tortious interference, unjust enrichment, and rescission/disgorgement. Simmtech also brings four fraudrelated claims related to the alleged FX manipulation.
Defendants filed the first Motion to Dismiss the SAC in December 2014 on the basis of forum non conveniens, res judicata and collateral estoppel, statute of limitations, and claim-related legal deficiencies. (ECF Nos. 74, 75.) This Court granted the Motion on solely forum non conveniens grounds on February 10, 2015. (ECF No. 79.) The Second Circuit reversed on February 23, 2016, (ECF No. 82-83), and defendants filed a renewed motion to dismiss on May 13, 2016. (ECF Nos. 95, 96.)
To survive a Rule 12(b)(6) motion to dismiss, a plaintiff must provide grounds upon which his claim rests through "factual allegations sufficient `to raise a right to relief above the speculative level.'"
In applying this standard, the Court accepts as true all well-pled factual allegations, but does not credit "mere conclusory statements" or "[t]hreadbare recitals of the elements of a cause of action."
A court may properly consider documents and contracts attached to or incorporated by reference in a complaint on a Rule 12(b)(6) motion to dismiss.
Defendants move to dismiss the four fraud claims in Claims 11 through 14
"Under res judicata, a final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in that action."
Plaintiff makes three arguments against res judicata.
First, the claims in the SDNY FX Action were adjudicated on their merits. Plaintiff's argument that dismissal based on the FTAIA is jurisdictional rather than a judgment on the merits is belied by Second Circuit caselaw. In
Next, although the fraud claims here were not litigated in the SDNY FX Action, the claims in both actions involved the "same transaction or connected series of transactions at issue," and "the same evidence is needed to support" them.
In this case, the claims relating to defendants' alleged exchange rate manipulation are based on the same "factual groupings" as the allegations in the SDNY FX Action. The common nucleus of fact is the alleged currency manipulation. From it, Simmtech has asserted varying legal theories: that it impeded Simmtech's participation in a competitive free market in violation of the Sherman Act, that it constituted deceptive business practices under the New York general business law, and that it constituted common-law fraud. The alleged manipulation is essential to all of these claims, and all the claims arise from the same "nucleus" of conduct that plaintiff complains of.
Although plaintiff asserts additional facts in the instant case relating to its reliance on the material omission (that defendants were manipulating currency rates), the decision not to plead the additional facts in support of fraud claims in the SDNY FX Action does not absolve plaintiff from res judicata. A plaintiff cannot avoid res judicata by "splitting his claim into various suits, based on different legal theories (with different evidence `necessary' to each suit."
Finally, Simmtech cannot use the class action form as a tool to circumvent the doctrine of res judicata. Simmtech argues that res judicata does not apply because it could not have asserted the common law fraud claims—which involve proving reliance—in the SDNY FX Action, which was brought as a class action. Simmtech cites to the class action exception to claim splitting. However, that exception protects
It makes little sense to apply the exception here because the concerns of representation in abstentia and lack of notice do not exist for Simmtech.
The bottom line is that plaintiff cannot slice and dice its theories into separate lawsuits. The doctrine of res judicata applies "not only as to what was pleaded, but also as to what could have been pleaded."
The October 2, 2014 judgment of the Seoul Central District Court—later affirmed by the Seoul High court—also bars Simmtech from relief on its remaining claims in this action. Before turning to the specific doctrines of res judicata and collateral estoppel as they apply in this action, this Court addresses several threshold issues.
First, the judgment of the Seoul High court should be recognized as a matter of comity.
Second, this Court applies federal res judicata and collateral estoppel rules to the remaining claims. Plaintiff appears to argue that the preclusive rules of Korea apply. (
Because defendant Citigroup Overseas Investment Corporation's is a federally-chartered Edge Act Corporation and the transaction at issue is of an international nature, there is federal jurisdiction over this case and this Court applies federal res judicata and collateral estoppel rules.
Plaintiff's claims 1 through 10 all involve the same nucleus of fact adjudicated in the Korean Action and is therefore barred by the doctrine of res judicata. As discussed above, the three elements of a res judicata defense are that 1) the previous action involved adjudication on the merits, 2) the previous action involved the same parties or those in privity with them, and 3) the claims asserted in the later action were or could have been raised in the prior action.
Plaintiff does not contest element one or the notion that Claims 1 through 10 in this action rested on the same essential facts arising from the same transaction or series of transactions as the Korean action.
First, the face of plaintiff's SAC contains a litany of allegations regarding its knowledge as of 2006 to 2008 that Citigroup—the American corporation—was the entity with which Simmtech was doing business. For example, a significant portion of the allegations are with regards to the fact that marketing materials and other documents provided to Simmtech in advance of their decision to enter into the KIKO transactions bore the Citigroup—not CKI—name and logo and were written entirely in English. (
Second, the question of whether a plaintiff was aware of the identity of defendants in the later action is not a relevant one for the purposes of res judicata. With respect to the identity of parties, all that res judicata requires is that the parties are in privity with each other.
Similarly, there is no requirement under res judicata that the court rendering the earlier judgment must have had jurisdiction over the party asserting res judicata in the later action.
In addition to res judicata, or "claim preclusion," the doctrine of collateral estoppel, or issue preclusion, also prohibits plaintiff from asserting Claims 1 to 7, Claims 9 to 10, and the non-FX manipulation claims in Claim 11-14. "Four elements must be met for collateral estoppel to apply: (1) the issues of both proceedings must be identical, (2) the relevant issues were actually litigated and decided in the prior proceeding, (3) there must have been `full and fair opportunity' for the litigation of the issues in the prior proceeding, and (4) the issues were necessary to support a valid and final judgment on the merits."
As for Claim 8, this Court has not identified any issues relating to tortious interference in the Korean judgment. In fact, there appears to be no discussion of the alleged interference with the February 2006 contract terms regarding termination and restructuring. This claim is therefore not precluded by collateral estoppel.
Claims 1 through 10 are also barred by the statute of limitations. A foreign plaintiff's claims must be timely under both New York law and the law of the jurisdiction where the action accrued. N.Y. C.P.L.R. § 202.
Claims 1 through 10 are barred by the Korean statute of limitations and therefore must be dismissed. Under Korean law, the statute of limitations for tort damages are the earlier of three years from when plaintiff became aware of his or her damages and the identity of the tortfeasor, and ten years from the occurrence of the tortious act. (Lee Decl., ECF No. 48, ¶ 10.)
Plaintiff has acknowledged that it knew of mounting economic damages as early as December 2008. (SAC ¶ 454.) In addition, plaintiff alleges that it believed the advice regarding the currency market and the suitability of the KIKO transaction came from Citigroup; in fact, plaintiff alleges that it believed it was doing business with Citigroup. (
As to plaintiff's contract claim for unjust enrichment and recission, Korean law requires that for such claims, the allegedly defrauded party must first seek recission of the contract within three years of plaintiff's becoming aware of the grounds for recission. (Lee Decl. ¶ 14.) Plaintiff does not dispute that it became aware of fraudulent conduct not later than December 2008. Therefore, the last to file date for this claim was December 2011. Plaintiff did not seek recission until 2013. Therefore, the unjust enrichment and recission claims are untimely.
Because plaintiff's claims 1-10 are time-barred under Korean law, they are also time-barred under New York law pursuant to CLPR § 202. Moreover, New York's statutes of limitations on also bar plaintiff's tortious interference claim and negligence claim.
A tortious interference claim has a three-year limitations period in New York and accrues no later than the date on which plaintiff allegedly sustains an injury, not the date of discovery. N.Y. C.P.L.R. § 214(4);
Negligence claims under New York law are also subject to a three-year statute of limitations. N.Y.C.P.L.R § 214(4)-(5). Plaintiff has pled this claim as a negligence claim, separate from its fraud claims. Therefore, it is subject to the three-year limitations period and not the six-year period for fraud. If plaintiff is alleging fraud in this claim, it is duplicative of plaintiffs other fraud claims and should be dismissed on that basis.
Plaintiff has not sufficiently demonstrated that the statute of limitations for these claims are tolled for equitable estoppel. "Equitable estoppel is appropriate where the plaintiff is prevented from filing an action within the applicable statute of limitations due to his or her reasonable reliance on deception, fraud or misrepresentations by the defendant."
The Court now turns to plaintiff's individual claims and finds that the vast majority of them fail to state a claim and must be dismissed.
The bulk of plaintiffs causes of action sound in fraud. "The elements of fraud are a misrepresentation or a material omission of fact which was known to be false by the defendant, made for the purpose of inducing the other party to rely upon it, justifiable reliance of the other party on the misrepresentation or omission, and injury."
The original fraud claims fail because plaintiff has failed to plead misrepresentation and justifiable reliance. First, the SAC fails to specify any particular statements as fraudulent misrepresentations. Second, in its briefing,
First, the statement that the KIKOs were "hedges" is not a cognizable misrepresentation. There is no question that at certain KRW/USD exchange rate levels, the KIKOs could provide a hedge. Plaintiff does not allege that defendants represented that KIKOs would be a hedge at all exchange rates; indeed, such an allegation would directly contradict the very premise of the KIKO. Furthermore, at no time did plaintiff allege that it did not understand the concept of a knock-out price or a knock-in price. Rather, it claimed that it did not understand that the relative consequences of the transaction for itself versus for CKI. That KIKOs may have been too aggressive a product or otherwise unsuitable for plaintiff's particular position does not mean that the "hedge" descriptor is a misrepresentation.
Moreover, any statements by CKI or defendants that the USD would depreciate relative to the KRW cannot be the basis for a fraud claim. "Mere predictions . . . may not form the basis for an action for fraud when both parties have equal access to the facts, or when it is obvious that the declarant is using a subjective standard. In these situations, reliance on the opinions is deemed unreasonable."
Plaintiff also cannot plead justifiable reliance on the "zero cost" representation. Essentially, plaintiff is alleging that it justifiably relied on defendants' promise that the KIKOs were free. This is patently unreasonable, as plaintiff, which had previously purchased currency forwards at cost—could not have justifiably believed that defendants' offering would miraculously be free. Furthermore, because the FX confirmations listed the premiums for each option, plaintiff could have easily deduced that the transaction was not actually cost-free. There is no justifiable reliance "where a plaintiff does not bother to consult a source of information that might have revealed the alleged fraud."
Finally, the fact that the FX Confirmations contained an express "Non-Reliance" clause cannot not be ignored merely because the Confirmation was in English. The clause states that each party "has made its own independent decision to enter into the Transaction and as to whether the Transaction is appropriate or proper for it based on its own judgment and upon advice from such advisers as it has deemed necessary. It is not relying on any communication (written or oral) of the other party as investment advice or as a recommendation to enter into the Transaction." (Kaplan Decl. Ex. 1, at 12.) Plaintiff has only asserted that its employees' command of English was limited, but makes no allegation that the Simmtech employees who signed the Confirmations did not understand this specific clause. In all events, a total "inability to understand the English language, without more, is insufficient to avoid this general rule" that the signer of an agreement is "deemed to be conclusively bound by its terms."
Plaintiff's fraud claims based on the alleged exchange rate manipulation and the "reverse" transactions between CKI and Citibank N.A. also fail.
First, there is no basis for reliance or loss causation resulting from any alleged exchange rate manipulation because, according to the CFTC's findings that plaintiff cites in the SAC, the manipulation occurred from 2009 to 2012, after plaintiff purchased the KIKO products. (
Second, plaintiff has failed to allege that the fact that Citibank N.A. was the entity with which CKI made its reverse transactions was a material omission. There is no question that by entering into the KIKO transaction with CKI, Simmtech knew that CKI was taking the opposite bet that Simmtech was taking. Simmtech also alleges if CKI had entered into reverse transactions with a non-Citi entity, that would not have been material to its decision to enter the KIKO transaction. (SAC ¶ 1054.) Nowhere in the SAC has Simmtech explained why the fact of CKI's transferring of its profits to a parent company versus another entity would make any difference to Simmtech. (SAC ¶ 297.) The claim is simply implausible and does not meet the
Plaintiff's claims for breach of fiduciary duty fail because it has failed to establish that defendants were fiduciaries.
Moreover, plaintiff's theory of fiduciary duty appears to be based solely on the fact that CKI provided financial advice. (SAC if 1017.) But mere dispensing of economic forecasts and opinions relating to the markets is insufficient to show that CKI "agreed to act for or give advice for the benefit of CKI."
Finally, as discussed above, the FX Confirmations contained express disavowals of fiduciary duty. The statement is short and direct: "Status of parties. The other party is not acting as a fiduciary for or an advisor to it in respect of the Transaction." (Kaplan Decl. Ex. 1, at 13.) Plaintiff's suggestion as to Simmtech employees' less-than-perfect command of English alone does not excuse it from being bound by these terms.
To assert an action for unjust enrichment, plaintiff must show "(1) defendant was enriched, (2) at plaintiff's expense, and (3) equity and good conscience militate against permitting defendant to retain what plaintiff is seeking to recover."
Plaintiff's basis for asserting unjust enrichment is that Citibank N.A. was enriched by entering into reverse payment transactions with CKI. However, there is no plausible allegation that the fact of the reverse payment transaction was what enriched Citibank N.A. at plaintiff's expense. As discussed above, any moves in the KRW/USD market at plaintiff's expense would have benefitted CKI. That CKI transferred any gains to Citibank N.A. is not in itself a basis for "unjustly enriching" Citibank N.A. Plaintiff has in essence failed to allege why the profitsweeping setup between CKI and Citibank N.A. is of any consequence. Indeed, plaintiff has acknowledged that if CKI had entered into reverse transactions with a non-Citi entity, that would not have been material to its decision to enter the KIKO transaction. (SAC ¶ 1054.)
Plaintiff alleges that the KIKOs are unenforceable because: 1) the contracts are "unconscionable," 2) plaintiffs should be protected by the doctrine of unilateral mistake, and 3) that defendants breached the implied covenant of good faith and fair dealing. These claims are pled as threadbare recitations—plaintiff does no more than make the above proclamations—and are wholly unsupported by factual basis.
Having found multiple bases for dismissal, the Court need not reach the remaining bases advanced by defendants. For the reasons set forth above, this action is dismissed. The Clerk of Court is directed to terminate the motion at ECF No. 95 and to terminate this action.
SO ORDERED.