Ex-Citi Trader Told Career Over Before Winning Suit Against Bankby
Stimpson was `automatically' fired amid regulatory pressure
Ruling may affect future employment cases filed by traders
Citigroup Inc. currency trader Perry Stimpson was fired and told his career was over after a “superficial” probe into allegations raised during currency market manipulation investigations, a London judge said.
Stimpson was dismissed in 2014 after the bank found evidence he had discussed confidential matters in trader chat rooms. He won his employment lawsuit against the bank even though those conversations were “foolish,” Judge Alison Russell said in a ruling made available Wednesday.
The bank didn’t consider whether other employees and managers were doing the same thing, the judge said. Stimpson argued his managers had also flouted Citigroup’s code of conduct.
The case was the first brought in London by one of the dozens of traders fired by banks in the aftermath of regulatory probes that have led to fines of at least $10 billion for rigging the $5.3 trillion-a-day foreign-exchange market.
The case may provide a boost for former Citigroup traders, Carly McWilliams, David Madaras and Robert Hoodless who have also filed unfair dismissal suits against the bank.
“The tribunal’s decision suggests that where confidentiality rules are not strictly adhered to in practice on the trading floor, there can be some scope for forgiving those employees who break the rules,” said Paul McAleavey, a lawyer at Brahams Dutt Badrick French, who wasn’t involved in the case. “It is rare that the argument ‘everyone else was doing it’ finds favor with an employment tribunal, but Mr. Stimpson appears to have succeeded on that front.”
Citigroup spokeswoman Edwina Frawley-Gangahar said the bank didn’t have anything to add to its statement Tuesday, when it defended its decision to fire Stimpson and said it would not tolerate breaches of its code of conduct.
While Stimpson was never accused of market manipulation, an internal Citigroup probe found he shared confidential information while referring to clients in code, according to Judge Russell’s written decision. When he was suspended in March 2014, a manager told him: “I am sorry to see your career end this way.”
The two managers who oversaw the internal probe of Stimpson “effectively took the position that the claimant had committed an act of misconduct that was in breach of policy and it did not matter whether other employees or even managers had been engaged in similar improper activity,” Russell said.
“In the spotlight of increased regulatory scrutiny, once the chats were found in the review, the claimant’s dismissal followed almost automatically,” the judge said.
Citigroup faced one of the biggest sanctions for FX-rigging, with the bank paying about $2 billion in fines to U.K. and U.S. regulators over the past year.
Regulators’ findings against Citigroup were “compelling evidence that in practice in FX, the line between market color and confidential information was not as distinct” as Stimpson’s managers suggested, according to Judge Russell.
In a 2009 review, a manager told Stimpson to join chat rooms in order to get better market information. While he wasn’t told to share anything confidential, he wasn’t given any guidance on what he could post, Russell said.
Russell found that Stimpson did not believe he was breaching confidentiality because of the way his peers and managers behaved.
“We had few guidelines, and the punishment handed to me was both harsh and unfair,” Stimpson, who represented himself at the tribunal, said in a statement Tuesday.
Russell also found that Stimpson had contributed to his dismissal and this would affect the level of compensation, which will be set after another hearing next year.