Late Lunchtime Links: Naive French bank compelled to pay €13m to trader who warned he was too expensive
The case of Raphael Geys has left Société Générale looking seriously out of its depth. Geys, SocGen's former head of fixed income sales, has won his €12.5m case after a judged deemed that SocGen didn't understand its own contract.
Geys, who spent 20 years working in banking, joined SocGen in 2005 after working at UBS and Merrill Lynch. At the time SocGen hired him, Geys was in the process of setting up an entrepreneurial venture with former Merrill Lynch colleagues. To persuade Geys against this, it seems SocGen offered him a very attractive formula-based package which would depend upon his sales figures, along with a tax efficient arrangement and a generous termination agreement. Before he joined, Geys reportedly warned SocGen that it should consider hiring someone less senior and less expensive.
Upon his arrival at the French bank, Geys set about doing what he'd been hired for and more than doubled the gross revenue of his division from €205m to €440m, thereby triggering an €11m bonus payment. SocGen promptly dismissed Geys and offered him a mere €7m severance package. Geys argued that SocGen never expected him to meet the upper levels of its performance criteria and that, having met them, the bank was compelled to pay him.
The Supreme Court has agreed with Geys. SocGen now looks very foolish and is seriously out of pocket.
Ex-Credit Suisse trader who had argued that his job was driving him to suicide and making him depressed, loses his case. (Bloomberg)
Who else wants a £250k a year housing allowance in order to live in a 5 bedroomed house near Bank? (Financial Times)
How can Mark Carney restrict the availability of mortgages in the UK when he’s sheltered from the housing market by a £250k housing allowance? (BBC)
“Make no mistake: for UBS traders, the manipulation of Libor was about getting rich,” said Lanny Breuer, US assistant attorney-general. (Financial Times)
A trader in Japan used a combination of bribery, flattery and fictitious trading to rig the price of money over three years, regulatory filings show. (Bloomberg)
The UBS findings blow apart any suggestion the rate-rigging was limited to rogue traders. (Wall Street Journal)
Top M&A deal names of 2012: Phoenix. (Deallawyers)