JPMorgan Sued by Trader Over $3 Million Decimal Point
JPMorgan Chase & Co. (JPM) is being sued by a trader who says he accepted a contract from the investment bank because a typographical error made him believe he would be paid 10 times what was actually offered.
Kai Herbert, a Switzerland-based currency trader, is suing JPMorgan for about 580,000 pounds ($920,000), his lawyers said at a trial in London this week. The original contract said Herbert’s annual pay would be 24 million rand ($3.1 million). JPMorgan blamed the mistake on a typographical error and said the figure should have been 2.4 million rand, according to court documents.
“That must have been the moment your heart sank,” Judge Henry Globe said at the trial this week, referring to when Herbert discovered the mistake. Herbert resigned from UBS AG (UBSN) in June 2010 following the offer from JPMorgan to relocate to Johannesburg. Herbert didn’t report for work after discovering the discrepancy and JPMorgan rescinded the employment offer in December 2010.
He has been unemployed since, other than eight months at Credit Suisse Group AG (CSGN) where he was fired in a round of layoffs in November. Banks globally have cut about 196,000 jobs since the start of 2011, according to data compiled by Bloomberg.
“How can you possibly suggest that they would pay you so much money for an executive director level job?” Charles Ciumei, a lawyer for JPMorgan, asked during Herbert’s cross- examination. The bank said Herbert could have mitigated his lost earnings by taking the position at the New York-based bank.
Banker salaries are the focus of several cases in London courts. Commerzbank AG (CBK) is being sued by former bankers at Dresdner Kleinwort Ltd. whose bonuses were cut by 90 percent after being acquired by Commerzbank in 2009.
“If it is too good to be true, then it probably is, but if the trader signed the contract in good faith it is probably binding,” Adrian Crawford, an employment lawyer at Kingsley Napley LLP in London who isn’t involved in the case, said in a phone interview. “It is all about the subjective view of the trader and JPMorgan will have to prove he knew there was a mistake in the contract but signed it anyway.”
Kate Haywood, a spokeswoman at JPMorgan declined to comment. Herbert’s lawyer, Dale Langley, declined to comment as did JPMorgan lawyer Stefan Martin.
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