Morning Coffee: Ex-Barclays' trading head exacts curious revenge on former employer. Badly behaved traders at Citi
Remember David Fotheringhame? He's a Cambridge University graduate with a first class degree in natural sciences and an Oxford PhD in computational neuroscience. He also has a first class degree in mathematics from the U.K's Open University and a Masters in Machine Learning (Dean's List, top 5%), which he took two years ago at University College London. He's 47 years old, a former quant trader at HSBC, Lehman and Nomura, and the ex-head of flow trading for electronic fixed income products at Barclays....
After nearly two years out, Fotheringhame is back. Sometime before September 21st, he will arrive at Barclays as a director of data commercialization, a role in which he will earn $190k (£149k).
Fotheringhame's is not your standard trader-turns-data-guy though. His is a more unusual case of trader gets fired from bank and then compels bank to rehire him through the courts, but courts deem that he needs a role in which he doesn't have to be registered as a “fit and proper person” and that it might therefore be ok for him to take a pay cut. - Hence the $190k data commercialization job.
It could have been worse: Fotheringhame told the judge he'd be happy with any role within the bank. Barclays didn't want to rehire him at all. After dismissing Fotheringhame in November 2015 for applying the controversial “Last Look” program, which allows banks to have a last look at client trades and to potentially trade in front of a client's order, Barclays had tried to argue that Fotheringham had created a “distrustful and closed” environment in his team, that he was “not professional or collaborative”, and that he was misusing last look as a profit-making opportunity. It even lined up several executives to explain that they couldn't rehire Fotheringhame under any circumstances.
Representing himself, however, Fotheringhame successfully convinced the judge that Barclays was wrong. And so he is returning, victorious, as director of data commercialization, a role in which he will earn a fraction of what he was on before. Bloomberg notes, however, that Fotheringham's new £149k role pays him a lot more than the £83.7k he would have been entitled to as compensation for unfair dismissal in the British courts. It also allows him to reinvent himself as a data expert - and other banks need plenty of those. Barclays is likely to be no more than a stepping stone for the clever ex-trader.
Separately, Citi's traders have been found wanting. Proprietary trading was, needless to say, banned by the Volcker Rule in 2013, but some traders at Citi have been engaging in it all the same. Worse still, they have been engaging in it, making losses of $81m and escaping detection because of Citi's lax controls. This all happened between 2013 and 2016, but Citi was yesterday compelled to pay a $10.5m fine for their wrongdoing.
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