Ex-RBS Trader Loses Unfair Firing Suit Over Improper CDO TradesKit Chellel
Wai Kin Hui, a former trader on Royal Bank of Scotland Group Plc’s collateralized debt obligation desk, lost a suit over his firing.
RBS was entitled to dismiss Hui because of attempts by his team to manipulate the bank’s internal valuation system, Judge Graeme Hodgson of the London employment tribunal said in a June 6 ruling.
“There were a number of trades which had no commercial purpose,” Hodgson said in the ruling released by the tribunal this week. “The claimant was aware of them. The claimant failed to report them. The claimant should have reported them.”
Three former CDO traders, including desk head Alex Mallinson, have sued alleging unfair treatment because the Edinburgh-based bank fired them after finding evidence that “wash trades” were used to manipulate its records. The desk made profits totaling about 250 million pounds ($391 million) in the three years to 2012, according to Mallinson’s claim.
Andrea Randall, Hui’s lawyer, said her client was considering an appeal. Rebecca Nelson, an RBS spokeswoman, declined to comment on the decision.
A judge in Mallinson’s case handed down a mixed ruling in May, finding the bank hadn’t handled his dismissal properly and also that Mallinson’s conduct contributed to his firing. Mallinson lost about 5.6 million pounds in bonuses because of an RBS finding of gross misconduct.
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 his dismissal, according to his written witness statement. He told the tribunal in a March hearing that he didn’t know how or why the 2010 trades could have been used to rig RBS’s internal valuation system.