Perry Stimpson is the first of four traders who have hearings at the East London Employment Tribunal. Carly McWilliams, David Madaras and Robert Hoodless have also filed court cases for unfair dismissal.
The hearings for these currency traders, which Citigroup claims have violated its code of conduct by using electronic communication system improperly, will take place between now and November. All of the cases are closely related to the foreign exchange market scandal which has been rocking the foundations of the FX market for the past several quarters as well as the corporate balance sheets of major banks.
These hearings show another side of the currency rates fixing scandal. Any precedent set here could potentially cause even more damages to banks if the former employees manage to build solid cases and demonstrate that banks have not been thorough in their assessment of the role of their employees in the FX fixing scandal.
Major banks tread carefully as FX fix is being ‘fixed’
Given the extent to which misuse of electronic communication was being propagated at major banks, and how it was in many cases tolerated by senior management, some experts say that there could be a solid case for the former currency traders.
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In what could be a very interesting hearing, the court is likely to call several Citigroup seniors to testify about the practices of one of the biggest foreign exchange dealers in the world.
Immediately following the eruption of the FX fixing scandal, a number of big banks began sacking employees on a massive scale, possibly being over-zealous with their caution.
Global regulators from the U.K. Financial Conduct Authority (FCA) to the U.S. Commodity Futures Trading Commission (CFTC) have been vigilant about identifying practices that led to several banks being fined hefty amounts in relation to their currency trading collusion schemes.
Citigroup has already been fined $2.3 billion by U.S. and U.K. regulators, which makes it the second most penalized bank after Barclays.
In the months following the unveiling of the currency markets rigging scheme that was created in online chatrooms by dealers at major banks, dozens of traders have been sacked. The financial institutions which participated in the endeavor have already been fined, incurring losses exceeding $10 billion. Criminal investigations in the U.S. and the U.K. continue.