A fired Citigroup Inc. trader sued the bank over allegations he was used as a scapegoat for the bank’s decade-long regulatory failures in executing stock trades for clients in Asia.
(Bloomberg) — A fired Citigroup Inc. trader sued the bank over allegations he was used as a scapegoat for the bank’s decade-long regulatory failures in executing stock trades for clients in Asia.
Ian Weir, an ex-sales trader for Asia–Pacific markets based in London, claimed at a London employment tribunal he was unfairly dismissed in June 2021 for gross misconduct following an investigation into whether some Citi traders properly disclosed the bank’s own financial interest when facilitating trades.
Hong Kong’s securities regulator imposed around HK$348 million ($44.5 million) fine on Citi in 2022 for serious regulatory failures in stock trades for clients between 2008 and 2018. It found that employees sent clients false “indications of interest” about stocks to drum up interest and made “misleading statements” about how trades would take place. The agency cited deficiencies in internal compliance and management for what it called pervasive dishonest behavior.
Read more: Citigroup Fined $45 Million For ‘Dishonest’ Decade in Hong Kong
Weir claims there was scarce compliance training while he was in his role from 2014 and had raised concerns numerous times about the processes. A lawyer representing said in the tribunal on Wednesday he was used as a “scapegoat” as part of a “cleaning of house” operation. He is seeking £123,197 ($149,460) from Citi.
“The sanction issued by the SFC is a drop in the ocean for Citi, yet Citi has imposed a sanction on me that has significantly ruined my career opportunities and cost me millions of dollars,” Weir said in a witness statement prepared for the lawsuit.
Weir said that employees had to train themselves and rely on historical and potentially outdated practices as guidance was never timely.
Citi denies that Weir was unfairly dismissed and that the bank had a reasonable belief that he committed gross misconduct causing a serious breakdown in trust and confidence, according to documents prepared for the lawsuit. Citi said it undertook a thorough investigation process and denied the disciplinary process was a sham. The bank separately ousted numerous traders in Hong Kong as part of a sweeping internal probe into the issue.
“Citi identified conduct that did not meet its standards and took appropriate action. We believe this unfair dismissal claim is without merit and look forward to presenting our evidence,” a spokesperson for Citi said in an emailed statement.
–With assistance from Donal Griffin.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.