Traders accuse banks of mistreating them to impress regulators
If you're a trader with an investment bank, you might want to hope that your business isn't subject to a regulatory investigation. If it is, you could find that the bank suddenly sides with the regulator and hangs you out to dry.
This is the accusation of three senior traders who say it happened to them. One has won a court case, one is in the middle of one, and one is thought to be pursuing his former employer through FINRA's closed system over his alleged mistreatment.
The trader embroiled in the current court case is Rohan Ramchandani, Citi's former head of European spot forex trading in London. Ramchandani today begins giving evidence against Citi at an employment tribunal in London's Canary Wharf. He claims that Citi wrongfully dismissed him in 2014 and made his dismissal known publicly without warning him. Worse, Ramchandani says Citi made a big deal about firing him just as U.S. regulators visited Citi's offices to investigate claims of FX rigging. Ramchandani was acquitted of rigging the market in October 2018.
Also acquitted was Robert Bogucki, the former head of Barclay's global macro division. As we reported in May, Bogucki spent a year out of the market after being accused of front-running sales of currency options owned by HP while he was working for Barclays. Even though the alleged 'front running' process was standard practice, Barclays quickly put Bogucki on a leave of absence and provided witnesses to testify against him in a criminal case that could have seen him jailed for decades. After Bogucki was put forward for trial, Barclays' lawyers persuaded the DOJ not to bring charges against the bank itself. Ultimately, however, Bogucki was acquitted on all counts. He declined to comment for this article, but is thought to be bringing a case against Barclays using FINRA's secretive resolution process in a case that could be worth millions.
Ramchandani and Bogucki's (alleged) cases are still in progress. Barclays didn't respond to a request to comment for this article, but Citi denies any culpability in Ramchandani's dismissal. A spokeswoman for the bank said it's contesting Ramchandani's claims because, "Individual accountability continues to be important" and employees at Citi are expected, "to adhere to the highest ethical standards.”
If Citi loses the Ramchandani case, it too could face substantial costs. Although wrongful dismissal compensation is capped at £80k, Ramchandani was earning over well £1m a year. If he's found to have been wrongfully dismissed, Citi could be compelled to give him his job back and award him five year's back-pay. (Ramchandani is also, incidentally, suing Citi for $112m in the U.S. after claiming that the bank 'framed him', which Citi also strongly denies).
Traders who say they've been wronged by the banks that employed them already have a champion who achieved victory in a similar battle. David Fotheringhame, Barclays' former head of electronic fixed income currencies and commodities (FICC) trading, successfully extracted £948k ($1.2m) in compensation from the bank earlier this year after it wrongfully fired him in 2016 at the behest of the New York Department of Financial Services. Fotheringhame has since done a Masters in machine learning and is helping ambitious young entrepreneurs, according to his LinkedIn profile, which might be more fulfilling than working in trading anyway.
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