Barclays Plc must release millions of dollars in deferred pay to former derivatives trader Mayank Chamadia who claimed the bank unfairly withheld compensation after he left the firm.
Financial Industry Regulatory Authority arbitrators awarded Chamadia $3.7 million in compensation that already would have vested, and said there is “no basis” to withhold or reduce payouts yet to vest, according to their ruling on the regulator’s website. That would release a total of about $9 million, according to Jonathan Sack, Chamadia’s lawyer.
Chamadia was put on leave in June 2013 to prepare testimony for investigators of possible interest-rate manipulation in the industry, according to Sack. Chamadia, who wasn’t accused of violating the law, resigned in October 2013 to join Balyasny Asset Management because he couldn’t trade at Barclays, hurting his reputation and ability to earn a bonus, Sack said.
“If you’re out the market people ask, ‘What’s happening to Mayank?’” Sack said in a telephone interview. “Even with nothing out there people go to the negative default, ‘Oh, he must have been in trouble, he must have done something wrong.’”
Mark Lane, a spokesman for Barclays, declined to comment. The Wall Street Journal reported the award on the April 3 U.S. market holiday.
Global authorities have investigated claims that more than a dozen banks altered submissions used to set benchmarks such as the London Interbank Offered Rate, or Libor, to profit from bets on related derivatives or to make the lenders’ finances appear healthier. Barclays was fined 290 million pounds ($433 million) by U.S. and U.K. authorities in 2012 for submitting false London and euro interbank offered rates.
The award includes compensation for Barclays’s “constructive discharge” of Chamadia, the arbitrators wrote in their ruling, using a term that typically refers to creating an intolerable work environment. As is typical for Finra arbitration rulings, the panel didn’t explain the reasoning behind their findings.