A former Royal Bank of Scotland Group Plc trader, who lost 5.6 million pounds ($8.7 million) in bonuses when the bank found evidence he manipulated internal pricing systems, was unfairly fired, a U.K. court said.
An employment tribunal judge found that while Alex Mallinson had been at fault, the Edinburgh-based lender hadn’t handled his internal challenge to the dismissal properly. Mallinson, who now works at Chalkhill Partners LLP, ran the collateralized debt obligation trading desk in London.
“Collectively, the concerns I have would fail to satisfy me that the appeal process was conducted in an appropriate manner,” Judge Paul Stewart said in a written decision. While Stewart didn’t rule on damages, he said the dismissal was 85 percent caused by Mallinson’s conduct.
RBS fired all three members of the CDO trading desk, which made about 250 million pounds in profits during three years under Mallinson, after the bank found evidence they had executed trades to manipulate its system for pricing securities. Both the other traders, Wai Kin Hui and Shailen Patel, also sued for unfair dismissal.
RBS spokesman Rebecca Nelson and Mallinson’s lawyer, Danielle Spiers, declined to immediately comment on the ruling.
If the sides can’t agree on damages, the tribunal will hold another hearing, Judge Stewart said.
While compensation for unfair dismissal is normally capped at about 70,000 pounds, Stewart said in his ruling that Mallinson’s lawyers indicated they might seek to recover his bonuses through the High Court in London.
Mallinson’s gross misconduct justified withholding the bonuses, RBS staff testified at February tribunal hearings.
Mallinson argued the immediate sale and repurchase of securities in 2010 had been to reduce the administrative burden on his colleagues to comply with internal pricing systems. RBS unfairly singled him out for punishment, he told the tribunal in February.