A former foreign exchange trader fired by Barclays Plc said that he was a scapegoat and that the British multinational bank had dishonestly contrived his dismissal to divert attention from its own failings.
David Fotheringhame, a former head of automated trading for electronic fixed income, currencies and commodities, is claiming unfair dismissal in a London court after being sacked by Barclays in 2015 for misconduct relating to the controversial practice of ‘last look’.
According to a Bloomberg report, the bank’s lawyer said in court that Fotheringhame’s job was to “look at the data, identify those clients who could be regarded as toxic because of their order flow and set last look accordingly”. The former trader replied that “the system automatically will be gentle to gentle clients.”
Lightning Bitcoin Redefining Fast Transactions and PaymentsGo to article >>
He added that the order was unfair but officials signed it “on pain of losing their banking license and hence having to close their U.S. businesses.”
In 2015, the NY regulator fined Barclays $150 million and ordered it to sack Fotheringhame for using its automated forex trading system to reject client orders that would have been unprofitable for the bank.
This order against the former head of automated electronic forex trading was part of a long-running effort to cover up the abuse of the last look policy to benefit his bank at the expense of its clients. According to the court filing, Fotheringhame told staffers to “just obfuscate and stonewall when the sales teams asked questions.”
The lawsuit provides a glimpse into the banks’ use of one of FX market’s most common, and potentially abusive, practices. The practice allows market makers get a final opportunity lasting a few milliseconds to reject an order after a client commits to a trade at a quoted price.