A foreign-exchange trader who Barclays refused to re-hire despite a court ruling forcing it to do so gets the last laugh.
A former managing director and foreign exchange trader at Barclays has been awarded $1.3 million in compensation after the bank refused to re-employ him despite a court order instructing it to do so.
David Fotheringhame was a casualty of the New York Department of Financial Services' (DFS) probe into the trading practice called «last look» that allows a bank an extra window of time when deciding on accepting or rejecting a client trade.
Widely Criticized in Europe
Considered by many industry watchers to be one more example of how U.S. regulators get to extract large fines from European banks – Barclays paid $150 million to settle this probe – the DFS investigation has been widely criticized in Europe.
The burden of proof is lower for the regulator than it would be if a case made it to a court of law but banks often accept large financial penalties for fear of having their licenses to operate in the U.S. revoked.
Key Man to Fall Guy
Fotheringhame was paid a base salary of approximately $1.3 million a year until his dismissal in 2016 when the DFS identified him as a «key player» in keeping the practice of «last look» hidden from clients and ordered Barclays to «take all steps necessary» to fire him.
In turn, the trader alleged unfair dismissal claiming banks reacted to the FX probes by terminating hundreds of staff because it made economic sense rather than proof of any wrongdoing.
Regulatory Investigations
The court appeared to agree and ordered the bank to re-hire him and as a consequence of its refusal, it has been ordered to compensate Fotheringhame. Regulatory investigations into currency trading have racked up over $10 billion in fines from banks.
