FX: Fired currency traders fight back
Ex-Citi trader Carly McWilliams’ employment tribunal win will spur on other fired currency traders waiting for their day in court and encourage more women to bring unfair dismissal claims, say legal experts. The banks’ argument that a handful of rogue traders acting behind senior managers’ backs were to blame for the currency rigging scandal is contested.
On Friday, fired currency trader Carly McWilliams won her unfair and wrongful dismissal claim against her former employer, Citi. The bank had suspended her in March 2014 while she was on maternity leave for sharing confidential client information with traders at other banks, and she left in November of that year.
She said in a statement: “It was fundamentally important to me that I take a stand and defend my reputation and integrity, and make clear the real circumstances of my dismissal.”
Citi said in a statement to Euromoney it stands by its decision to dismiss McWilliams and two other currency traders: Perry Stimpson and Robert Hoodless.
“Individual accountability is important to us and for that reason we defended the cases in the tribunal,” stated Citi. “We expect our employees to adhere to the highest ethical standards and will not tolerate breaches of our code of conduct.”
McWilliams’ win will spur on those who are waiting to have their cases heard across the industry, say legal experts.
She won five months after Stimpson won his claim for unfair dismissal. Hoodless is waiting for the outcome of his claim. Employment law barrister Oliver Isaacs defended McWilliams, and has represented a number of currency traders who have filed claims against financial institutions in the past 18 months.
“There are certain common denominators between Perry and Carly’s case which may give others hope that their cases would also be successful,” he says.
Banks are guilty or responsible for culture established over many years. They can’t undo that in one go by sacking junior people as a sacrificial offering. - Matt Richardson, betterFX
More disgruntled traders are expected to have their cases heard later this year, including that of Bob de Groot, former head of spot currency trading at BNP Paribas. His hearing was pushed back from April to mid-July, according to a spokeswoman at the Central London Employment Tribunal. He did not respond to an attempt to contact him via LinkedIn.
Specialist employment lawyer Tim Johnson says a couple of clients have since called him to find out if the McWilliams verdict improves their prospects. He believes the verdict is encouraging for women working in the City who have been unfairly dismissed, but are hesitant to pursue a claim.
“Reports of women winning cases at tribunal does encourage women to bring claims,” says Johnson.
He says it is particularly heartening for those have been dismissed while on maternity leave.
“All banks are under pressure, some are cutting more corners than others. But yes, banks are cutting corners when it comes to maternity rights.”
McWilliams contended she was treated as a “scapegoat” and “cannon fodder” by Citi, and successfully argued she genuinely believed it was acceptable to share information about certain clients such as hedge funds and central banks.
The judge concluded she did not believe herself to be doing anything wrong or outside the range of behaviours demonstrated by those around her, including her colleagues and line manager.
McWilliams told the tribunal she had followed the directions of senior managers such as Jeff Feig, former global head of G10 FX, and that the bank had encouraged the sharing of client information. Feig did not respond to an attempt to contact him via LinkedIn.
She emailed Feig in 2014: “I did not invent our practices. That is what I was introduced to and what has operated since I was introduced to it. It is what I was required to do.”
Citi insists Feig had no knowledge of or condoned inappropriate information sharing practices with traders at other banks about specific clients. In a statement to Euromoney, Citi said: "We categorically disagree with the inferences reached regarding Mr. Feig."
The currency rigging scandal does not smack of a few rogue traders going out of line, says Matt Richardson, founder of broker betterFX. An FX veteran, he has worked in the industry for 20 years, most recently as head of treasury foreign exchange for Europe, the Middle East and Africa and Asia-Pacific at JPMorgan. He left last year to set up betterFX. “Banks are guilty or responsible for culture established over many years,” he says. “They can’t undo that in one go by sacking junior people as a sacrificial offering.
“You can’t single out a few individuals. If everyone else in the trading room is engaging in practices that are commonplace and you say you won’t do it, you will fall behind in that competitive environment. Hanging out a few people to dry – regulators won’t take it seriously.”
However, there are no winners in these cases, say lawyers.
Employment lawyers claim banks increasingly refuse to settle out of court, preferring to argue at tribunal that they correctly dismissed traders for breaching codes of conduct. This is to show regulators and the public that they are cleaning up their act – but this move incurs damaging accusations and negative publicity.
Traders that are vindicated walk away with little. The maximum award from an employment tribunal for unfair dismissal is £78,335 and up to £25,000 for wrongful dismissal. Both McWilliams and Stimpson were found to have contributed to their dismissal, which lowers the award, and the process itself is expensive and exhaustive.
Nonetheless, some traders feel it is their only option if they stand any chance of working in the City again. Once a trader has been fired, they lose their approved status with the Financial Conduct Authority (FCA). “It’s a disaster for them in terms of future employability, if they have been dismissed for serious breaches,” says Nicholas Hadaway, partner at HR law firm Lewis Silkin. “They have to challenge the FCA, but can sometimes feel it would look odd if didn’t also bring a claim before a tribunal.”
Nevertheless, even with a win it is likely to be an uphill struggle to find work again in the City.