Ex-LIBOR traders who've been sitting at home, nurturing their grievances and waiting to clear their names have been given further reason to feel hopeful: another of their number has been cleared.
Following the exoneration of a group of LIBOR traders at Deutsche Bank who were deemed to have been dismissed without due cause, U.S. regulator has awarded the impressive sum of $2,146,254 to ex-Barclays rates trader Dong Kun Lee. Kun Lee spent nine years at Barclays before he was 'terminated' at the end of July 2012. According to his FINRA broker report, his termination was the result of allegations that, 'the individual engaged in inappropriate communications related to LIBOR.'
Last night, FINRA released a dispute resolution note stating that Kun Lee had brought a case against Barclays accusing the bank of, among other things: breach of contract, violation of New York labor laws and unjust enrichment (where one person unfairly enriches themselves at the expense of another), quantum meruit (when a contractual agreement isn't fulfilled).
Barclays attempted to dismiss the case, but FINRA judged that Kun Lee is owed $2.1m in damages. Barclays declined to comment on the case.
His success should bring Thanksgiving thankfulness to other dismissed LIBOR traders, especially Ritankar ‘Ronti’ Pal, who was head of U.S. interest rate trading at Barclays in New York and was dismissed at the same time as Kun Lee. Other Barclays bankers dismissed during the LIBOR investigation include Ryan Reich, a 30-year-old former Barclays swaps trader based in New York who was fired in 2010 and hasn't worked in the U.S. since according to his broker report. In total, around 100 Barclays staff have been named on a 'secret list' relating to the UK regulator's LIBOR investigation.
It's not clear whether Pal and Reich have also initiated action against Barclays. However, one rates headhunter in contact with dismissed LIBOR traders, said there are hundreds of LIBOR traders out of the market who are bringing cases against their former employers. "A lot of people have lost their livelihoods because of this," he says.
Kun Lee's $2.1m compensation looks generous. However the headhunter points out that it pales into insignificance compared to his likely earnings. "He was a huge trader at Barclays, turning over $100m a year and making around 5% of that," says the trader. In this context, a one off payment of $2.1m looks meagre.
Worse, Kun Lee's FINRA report continues to bear the record of his termination and investigation for alleged LIBOR failings. This may yet be amended post-Thanksgiving. If it's not, the headhunter points out that he may struggle to find work again.