Second Ex-RBS Trader Sues After Being Fired for CDO ManipulationKit Chellel
A second trader from Royal Bank of Scotland Group Plc’s collateralized debt obligation desk sued the bank at a London tribunal, saying he was unfairly fired.
Wai Kin Hui was dismissed for gross misconduct in July 2012 after an internal investigation found he had been involved in attempts by the desk to manipulate the bank’s pricing system. Hui told the tribunal yesterday he didn’t know of any wrongdoing.
RBS’s former head CDO trader Alex Mallinson appeared at a London tribunal in February saying he lost about 5.6 million pounds ($8.5 million) in deferred bonuses when the lender dismissed him over so-called wash trades -- selling then buying back securities with no commercial purpose. The tribunal hasn’t issued a ruling in Mallinson’s unfair dismissal case.
Hui testified yesterday that he didn’t know how or why the 2010 trades could have been used to rig RBS’s internal valuation system. “I still don’t know, as I sit here, how you can manipulate” the process, he told the judge.
As the desk’s junior trader, Hui earned an annual salary of 85,000 pounds and bonuses of as much as 175,000 pounds, some of which were withheld because of the bank’s finding of gross misconduct, according to his written witness statement. He said he hasn’t been able to find another job.
While damages for unfair firing are capped at about 74,000 pounds in the U.K., bank employees can seek to recover lost or withheld bonuses if a tribunal rules they weren’t fairly treated.
RBS spokeswoman Sarah Small and Hui’s lawyer Andrea Randall declined to immediately comment.