Citigroup Workers Told to Share Client Notes, Ex-Trader Saysby
Ex-trader Carly McWilliams makes claim in London lawsuit
Citi's Jerome Kemp denies allegation while giving evidence
Citigroup Inc. executives encouraged foreign-exchange traders to use electronic chat rooms to share client orders with employees of rival banks, a practice that forced finance companies to pay $10 billion in regulatory fines, according to evidence presented to a London employment tribunal.
Carly McWilliams, a London-based trader fired during a probe into the currency-rigging scandal, said executives were aware of how the foreign-exchange desk operated long before the scandal attracted the attention of regulators, according to evidence read in court on the first day of her employment suit. Jerome Kemp, the Citigroup executive who fired McWilliams, denied the claim in court Tuesday.
"The bank has encouraged precisely what it now complains of," McWilliams said in an e-mail to the bank’s HR department before her disciplinary hearing on May 7, 2014.
McWilliams is one of several traders to sue their former employers in London’s employment tribunals in recent months, after banks suspended dozens of people who were subject to regulatory probes. Last week Shivani Mathur, implicated in the Libor scandal, began her case against Deutsche Bank AG. Ian Drysdale, a former Royal Bank of Scotland Group Plc trader, convinced a judge that RBS failed to follow the correct procedure when it fired him, but he didn’t win any damages.
McWilliams is the second trader fired during the scandal to have a claim reach court, with Perry Stimpson winning his case in November. The bank is taking no chances this time, sending 10 lawyers to a preliminary hearing on Monday, a move that "must be a record,” judge Alison Russell said. David Madaras and Robert Hoodless have also filed claims.
Asked by the judge to elaborate on the difference between McWilliams’ case and Stimpson’s, Citi’s lawyer Thomas Linden said that she was guilty of "willful misconduct.”
The judge "found that Stimpson’s wrongdoing was foolishness on his part," said Linden. "We don’t accept that with McWilliams."
Citigroup said McWilliams was fired after its own investigation.
“Individual accountability continues to be important to Citi and for that reason we are defending Ms. McWilliams’ case in the tribunal,” the bank said in a statement. “We expect our employees to adhere to the highest ethical standards.”