Former Citi trader tells court information-sharing was common practice: Update
A former Citigroup foreign exchange trader claiming unfair dismissal after a currency rigging scandal told a London court on Tuesday that the activities for which he was fired were common practice at the U.S. bank at that time.
Perry Stimpson, who was a forex trader at Citigroup for 25 years, was dismissed last November in the wake of a scandal that resulted in banks paying billions of dollars in fines. He told the East London employment tribunal that he wanted to set the record straight and repair his reputation.
In a filing to the court, Citi said Stimpson was dismissed for serious breach of contract, alleging he appeared to have shared confidential client information with traders at other banks via electronic chatrooms.
Citi said Stimpson also took “steps to deliberately conceal such disclosures”.
Stimpson, who is representing himself, said: “I’m not here to mud-sling, I’m here to ensure the truth about foreign exchange at Citigroup is heard once and for all.”
Industry sources have said the case could be the first of many claims by traders fired over allegations of misconduct in the $5.3 trillion-a-day foreign exchange market.
“I’m trying to paint a picture of the bank at the time and why my actions were normal across the industry and at the respondent (Citi) … It shows the information-sharing practices that I have been criticised for was a common practice,” Stimpson told the packed hearing at the start of a case scheduled to last four days.
Employment tribunal judge Alison Russell ruled client names could not be reported from the hearing, but there would be no reporting restrictions on the naming of Citigroup staff mentioned during proceedings.
She said Stimpson’s case would not be rolled together with those of three other former Citigroup forex traders scheduled to be heard in the coming weeks.
A lawyer for Citigroup, Diya Sen Gupta, had told the hearing it would be “contrary to the interests of justice” if other Citi staff were named without having had a chance to respond to allegations.
Stimpson said at the hearing it would be unfair to allow senior Citi staff to remain anonymous.
“My dismissal has been a very public affair,” he said. “Senior management — responsible for a lack of controls — have been afforded complete anonymity. I would see that as unfair.”
Related article: Former Citi FX trader set to challenge dismissal in London court
CITI FINES
Citigroup has paid $2.3 billion in fines to U.S. and British authorities, the second highest settlement among seven major banks fined $10 billion for failing to stop traders from alleged manipulation of forex trading.
The bank’s chief executive Mike Corbat has said the behavior that resulted in its foreign exchange fines was “an embarrassment to our firm”.
He said in May the bank took action quickly after becoming aware of violations of its code of conduct and policies and after internal investigations it had fired nine staff and taken other disciplinary action.
U.S. and British authorities said dealers shared confidential information about client orders and coordinated trades to boost their own profits in online chatrooms with pseudonyms such as “the players”. Regulators said the misconduct at the banks ran from 2008 until October 2013.
Jerome Kemp, Citi’s global head of futures who was involved in Stimpson’s disciplinary process and was a witness for the bank at the hearing, said four of Stimpson’s chatroom discussions raised particular concern about breaches of client confidentiality.
Kemp said in his witness statement Stimpson admitted that in one chatroom he disclosed a client had sold 100 million pounds. In another chatroom in May 2010, he (Stimpson) discussed sales orders of clients, Kemp said in his witness statement.
Kemp told the court there were “some gaps” in terms of Citi’s training and compliance procedures, but the bank was clear on its guidelines on keeping client information confidential in chatrooms.
Stimpson is expected to testify and bring his own witnesses on Thursday and Friday.
Source: Reuters – Former Citi trader tells court information-sharing was common practice
