LONDON (Reuters) - A former foreign exchange trader claiming he was unfairly dismissed by Citigroup (C.N) said the sharing of client information looks wrong now it has come under scrutiny from regulators, but was condoned by senior management at the time.
Perry Stimpson, a forex trader at the banking group until he was fired last November, is claiming unfair dismissal at a London employee tribunal. Citi says he was dismissed for serious breaches of contract, alleging he shared confidential client information with traders at other banks via electronic chatrooms.
“Now in the glare of scrutiny from regulators these activities look wrong. But at the time they were market convention,” Stimpson said under cross-examination on Friday.
Citigroup is one of seven banks to be fined more than $10 billion for failing to stop traders manipulating the forex market.
Stimpson said he saw senior forex staff sharing information about client activities, and even more senior staff effectively condoning this activity as they were aware of it but took no action.
“If you look at any organization, surely you look to senior management,” Stimpson said. “The culture in any organization is set by senior management down. If you see senior management do something, it implies to you it’s OK.”
Citigroup said in a statement: “Mr. Stimpson is making these allegations to deflect attention from his own misconduct. All of the allegations of wrongdoing being made by Mr Stimpson have been investigated and were found to be without merit.” Its lawyer told the tribunal the investigations had been conducted internally and by its external counsel.
Stimpson admitted he shared information about a central bank client in a chatroom. But he said whether client information could be shared was a “bit of a gray area”. Citi staff knew details of some client activities were strictly confidential, but the actions of central banks were widely shared, he said.
“It was implicitly understood that central banks were OK to talk about ... It was standard market practice that went on for years,” he said.
Citigroup told the tribunal it had concerns that Stimpson breached client confidentiality on at least 12 occasions in chatroom conversations, which broke its code of conduct. The dates of the breaches have not been disclosed, but they include conversations in 2010.
Citigroup said its code of conduct made no exceptions for central banks or any clients. Stimpson agreed, but said the bank did not provide guidelines on what was allowed in chatrooms until January 2013.
Citi’s lawyer Diya Sen Gupta said because other traders shared information in chatrooms did not allow Stimpson to do so. “Just because other people are doing something wrong, doesn’t mean you are excused from your own behavior.”
The hearing will extend into next week. Employment tribunal Judge Alison Russell is expected to give her decision by early October.
Editing by David Holmes