While the vast majority of the litigation engulfing the FX world in the past few years is related to the FX benchmarks rigging fiasco, Bloomberg reports about a rather unusual lawsuit. An FX trader formerly employed by the Royal Bank of Canada, is suing his former employer for £13 million ($18 million).
His allegation: unfair dismissal due to a claim that his former senior manager offered him a way out of a trading error by offering a bribe. Apparently, the trader whose name is John Banerjee lost $880,000 overnight in June 2015. The substantial loss materialized after a colleague of his failure to close his position in the South African rand.
After the college allegedly denied that any error was made, Banerjee escalated the issue to RBC’s Global Head of FX trading, Ed Monaghan. The former RBC trader proceeds with his claim, stating that the senior officer failed to act, which prompted him to insist on a detailed investigation.
“An Investigation Will Make the Department Look Bad”
The verbatim quote from the response of Monaghan to Banerjee’s request: “An investigation will make the department look bad, and that means you will look bad. Is it the loss that bothers you? I’ll cut you a check for the loss — just drop it.”
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According to Banerjee, this offer constituted a bribe. The Royal Bank of Canada commented in a statement to Bloomberg on the matter, stating that the claim doesn’t have any merit and the firm will be “vigorously defending its position.”
Transfer of Losses
The legal reps of the RBC’s former Global Head of FX Trading doesn’t recall using the precise wording “I’ll cut you a check”. They elaborated that his intention was to offload the losses from Banerjee’s trading book.
Banjerlee is now 50 years old and he’s previously worked at Citigroup Inc., Barclays Plc and Standard Chartered Plc. The RBC has dismissed him alleging that he repeatedly was late for work and had “exited” three of his colleagues at the spot FX trading desk. Monaghan took early retirement in October 2017.
Mr Banjerlee also elaborated that the FX policy was as Bloomberg states: “incoherent, inconsistent and impossible to comply with”.
Banerjee claims that RBC’s compliance procedures didn’t go beyond “box-ticking,” and that he escalated the issue to the Global Head of FICC. After he was called to a meeting to discuss the issues raised, one of his colleagues at the bank recommended him to recall Joe Peschi’s character from “Good Fellas,” Tommy DeVito.