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Scotiabank unit says fired trader owes it money
February 14, 2007 / 8:02 PM / in 11 years

Scotiabank unit says fired trader owes it money

By Nicole Mordant

VANCOUVER, British Columbia , Feb 14 (Reuters) - A unit of Bank of Nova Scotia (BNS.TO) was justified in firing a top-earning trader, owes him no money, and is claiming damages from him, Scotia Capital said in court documents responding to the trader’s C$105 million ($90 million) wrongful dismissal lawsuit.

In documents filed late on Tuesday in the Ontario Superior Court of Justice, Scotia said it is seeking C$4 million from David Berry, once their star preference share trader until the investment dealer arm of Canada’s second biggest bank fired him in June 2005.

Berry said in a statement on Wednesday that he rejects Scotia’s “allegations and characterizations”.

Berry, who was earning as much as C$15 million a year before he was fired, was dismissed after the bank and Market Regulation Services, the Toronto Stock Exchange’s trading watchdog, investigated some of his share dealings.

Scotia said in a 20-page response to Berry’s suit that he is attempting “to blame others for his own misconduct, and to seek compensation to which he is not entitled.”

It added: “It is in fact Berry who is responsible to compensate Scotia for the harm and expense his misconduct has caused it.”

Berry launched his suit in November claiming that the real reason Scotia fired him was because he wouldn’t accept a deep pay cut and that other executives were jealous of him. He is seeking C$105 million in damages and wages he says he is owed.

Berry’s pay package had included a clause that he was entitled to 20 percent of Scotia’s net earnings in the preferred shares operation. As the unit grew, Berry’s salary surpassed that of even Scotia’s chief executive.

Scotia alleges that some issuers of preference shares had to pay more in commission to dealers than they should have because of some of Berry’s trades. Scotia said it paid out more than C$3.5 million to reimburse the issuers when it discovered this.

“Scotia has had to incur this expense solely as a result of Berry’s misconduct, and he should accordingly be responsible for indemnifying Scotia for those payments,” the Toronto-based dealer firm said.

The Globe and Mail newspaper reported on Wednesday that Scotia Capital is expected to pay more than C$500,000 as part of a voluntary settlement with Market Regulation Services after their probe into Berry’s trades.

A spokeswoman for the securities regulator and a spokesman for Scotia declined to comment on the report.

The paper said Scotia has agreed in principle to a settlement with the regulator and will not be sanctioned for allegedly failing to supervise Berry.

($1=$1.17 Canadian)

((Reporting by Nicole Mordant, editing by Janet Guttsman; Reuters Messaging:; +604 664 7315)) Keywords: BANKOFNOVASCOTIA COURT/TRADER

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