RBS Sued by Fired Emerging-Markets Rates Head Over BonusAndrea Tan
Royal Bank of Scotland Group Plc’s former head of emerging market rates Lee Tze Kiang sued the lender claiming his bonus was wrongly forfeited when he went to work for a hedge fund firm after he was fired.
Lee, dismissed in June 2012 after an investigation into two traders he supervised, said in filings in Singapore’s High Court that he had alerted RBS to their irregular activities. He’s seeking at least S$3.2 million ($2.5 million).
RBS, which plans to claw back 302 million pounds ($463 million) from bankers to help pay U.S. fines over interest rate rigging, said in its defense filed July 1 that its rules provide for deferred awards not to vest if the beneficiary engages in competitive activity. It denied Lee’s assertion in his May 28 lawsuit that the provision is unenforceable and void.
“Unfortunately, Singapore’s labor laws allow employers to terminate without justification relatively easily,” Lee said in a phone interview today.
Patricia Choo, a Singapore-based spokeswoman for RBS, declined to comment on the case.
Lee joined JL Capital Pte, a Singapore-based hedge fund firm, as a senior portfolio manager on Oct. 1. JL Capital uses RBS as a prime broker and is a client, not a rival, Lee said in his lawsuit.
JL Capital was started in 2002 by James Loh, former regional head for interest rates and Asian currencies risk management in Asia at UBS AG, according to the firm’s website.
Jeremy Tan, a JL Capital spokesman, said Lee had left the firm and declined to comment on the lawsuit.
Lee said in his lawsuit that he alerted his superiors to the irregular activity which started before he managed the two employees.
Lee had been negligent in his management, “leading to substantial financial loss for the group,” RBS said in its defense. Lee should have further questioned the mis-marking by one of his subordinates, the Edinburgh-based bank said, without specifying the financial product.
RBS was one of 19 banks ordered by the Monetary Authority of Singapore last month to set aside as much as S$12 billion at zero interest after 133 traders in the city state sought to manipulate benchmark rates. RBS has also been punished by regulators in the U.K. and Japan for rate-rigging attempts.
Even if Lee is entitled to any of his deferred bonuses, RBS said in its filing that they would be reduced according to group policy of a 15 percent clawback on staff of its markets and international banking business to help recoup its fines.
Lee said in a July 15 filing that the U.S. fines for RBS’s attempts at Libor rigging are unrelated to any business unit or profit center he had worked in at the bank and are “inconsistent” with his claim.
The case is Lee Tze Kiang v The Royal Bank of Scotland Plc S478/2013. Singapore High Court.