Mr Z Yang v Credit Agricole (Corporate & Investment Bank) London Branch: 2207054/2020
EMPLOYMENT TRIBUNALS
Case No 2207054/2020
Between
Mr Z YangClaimantCredit Agricole (Corporate & Investment Bank) London BranchRespondent
Before
Employment Judge A JamesMs C D’Souza (instructed by counsel) for claimantMs C Davies QC (instructed by counsel) for respondentDate 18 May 2022
JUDGMENT
(1) The claim for unfair dismissal (s.94 Employment Rights Act 1996) is upheld.(2) The claim for direct race discrimination (s.13 Equality Act 2010) is upheld in relation to the allegation that Tony Botting commenting to Laurent Chedin when interviewed on 14th May 2020 that: “I worked in Asia for 5.5. years, so I’m used to working with Asian people. The cultural aspect is something you need to be aware of in terms of loss of face. They can sometimes be reluctant to agree to something that has gone on”.(3) All other claims - for whistle-blowing detriment (s.47B Employment Rights Act 1996); automatically unfair dismissal for whistle-blowing (s.103A Employment Rights Act 1996); for direct race discrimination (s.13 Equality Act 2010); and for victimisation (s.27 Equality Act 2010) - are not upheld and are dismissed.
REASONS
[1]The agreed issues which the tribunal had to determine are set out in Annex A. Some of the issues were withdrawn during the hearing, and those are shown as being struck-through on the list.
The hearing
[2]The hearing took place over 18 days. Evidence and submissions on liability/remedy were dealt with on the first 15 days. Three further days were subsequently arranged for the tribunal to deliberate and reach its conclusions on the issues. Judgment was reserved.[3]The tribunal heard evidence from the claimant. For the respondent we heard from Walid Assaf, Global Head of Macro Trading; Laurent Chedin, Head of CVA and Scarce Resources Management; Eric De Lambilly, Global Head of the Transversal Function Group; Donald McLean, Employment Relations Manager (now Head of Employee Relations); and Philip Cooper, Head of Compliance UK. The tribunal was asked to take into account the written evidence of Sarah Henchoz, Partner in Allen and Overy’s employment team and Francois Racine, Head of Global IT and Information Systems Security (ISS) UK and EA. Ms D’Souza questioned the relevance of their evidence in the light of the amended list of issues but did not have any questions for those witnesses and nor did the tribunal, hence they were not required to attend the hearing.[4]There was an agreed hearing bundle of nearly 3,000 pages. A limited number of documents were added to the bundle during the hearing. References to the bundle as set out below here the tribunal considers that it may help the parties to understand the decision.[5]The claimant indicated on the first day of the hearing that an application was to be made to admit a set of documents, and to be allowed to cross examine on them [the GENPRU documents); and an application for inspection of the recording of a telephone call between Laurent Chedin and Rita Sqalli on 26 May 2020. The tribunal agreed to hear that application on the morning of the third day, at which time the Panel would have a better grasp of the issues and evidence in the case. The respondent also applied to add a further single page document, which was not opposed, and that was added at page D2263.[6]The application for inspection of the recording was granted, for reasons given at the time. In the event, the claimant’s transcription and translation of that document was not materially different from that of the respondents. The tribunal also agreed that the GENPRU documents should be added to the bundle, and that Ms D’Souza would be allowed to ask limited questions of some of the respondent’s witnesses in relation to those documents. This was because it appeared to the tribunal that those documents might be relevant to the issues in the case. In the event, cross-examination on those documents was relatively limited. The documents were added to the end of Bundle D.[7]As the decisions in relation to inspection/admissibility of the GENPRU documents has not in the event materially affected the outcome of the case, the Tribunal does not set out in any detail the reasons for the decisions made in respect of them. The parties are at liberty to ask for written reasons in relation to those decisions if they see fit.[8]During the hearing, further letters between the parties regarding the issues and witness evidence were added to the end of Bundle B. Fact findings The claimant[9]Mr Yang (referred to in the rest of this judgment as ‘the claimant’) is a Chinese national. He was born and raised in China.[10]The claimant commenced his first job in finance in July 2000 at the Bank of China in Shanghai as a Foreign Exchange (FX) Trader. In 2003 he transferred internally to the Precious Metals trading desk (PM Desk). After that, the claimant spent about 5% of his time at the Bank of China on FX Trading.[11]In February 2006 the claimant moved to the United Kingdom as an expatriate, working at the Bank of China in London. Since February 2006, he has worked in various banks in London, always as a precious metals trader. Employment by the respondent[12]The claimant commenced employment on 3 June 2011 with the respondent (referred to below as the respondent, CACIB, or the Bank). The claimant was initially employed as a Trader in Commodities Precious Metals within the Fixed Income Markets business, with the corporate title of ‘Director’.[13]On 2 July 2012 the claimant transferred to the FX Precious Metals Trading department. All other terms and conditions of employment remained the same.[14]Whilst work on the PM Desk took up most of the claimant’s time, the PM Desk is part of the FX department at the respondent. The claimant attended meetings with FX traders and he acted as a mentor to one of them.[15]On 1 January 2015 the claimant transferred to the FX Spot G10 department. All other terms and conditions of employment remained the same. At that time, there were three precious metals traders, Stephen Pender, Cadence Donaldson and the claimant. Mr Donaldson and the claimant reported to Mr Pender and he reported to Mr Tony Botting.[16]Mr Pender left in November 2015 and was not replaced. Mr Botting took over the Head of PM Desk role. The claimant subsequently covered Forward pricing and managed the Forward book as the chief Forward trader. He became the Senior Metals Trader and the Chief Forward Trader. He took on the responsibility for management of the traders on the PM desk.[17]The claimant’s 2017 appraisal stated [C108]: Sam has grown more confident in his abilities as a manager. This is pleasing to see. The goal in 2018 will be to ensure that flows down to each team member in turn. His own individual performance has been strong but there are still some weak points in the team which will need to be worked such as HK in general, options in London. A managers role is not just to highlight issues, but to come up with solutions that work. Sam has also worked very hard on the depos and loans project which is almost ready to go. Well done on this. 14 On 1 January 2018 the claimant was promoted to Executive Director. The change was confirmed in writing on 2 March 2018. 15 All of the appraisals we were referred to were positive, save that as noted above, it was acknowledged that the claimant’s management skills could be improved. Training was promised in 2020 but due to the events that subsequently unfolded, never materialised. The Senior Manager’s and Certification Regime (SMCR) 16 The Senior Manager’s and Certification Regime (SMCR) was introduced in 2016 by the Financial Conduct Authority (FCA) following the financial crash in 2008. The aims of SMCR include the protection of consumers; to improve accountability; and to improve conduct. The SMCR applied to the claimant. He was classed as a Senior Manager in his role at the respondent bank. 17 Under SMCR, the FCA conduct rules (COCON) apply to traders. They therefore applied to the claimant in his role. If any trader subject to COCON is found by a bank to have breached the conduct rules, the bank is obliged to report the matter to the FCA. This is known as the regulatory reference regime (see further, Section 15.11.6 below).[18]The FCA’s individual conduct rules (COCON) include the following: Rule 1 - You must act with integrity. Rule 2: You must act with due skill, care and diligence. Rule 5 - you must observe proper standards of market conduct[19]COCON 3.1.2 G states that in assessing compliance with, or a breach of, a rule in COCON, the FCA will have regard to the context in which a course of conduct was undertaken, including:(1) the precise circumstances of the individual case,(2) the characteristics of the particular function performed by the individual in question, and(3) the behaviour expected in that function.[20]As for the business itself, the general organisational requirements include the following: 4(1) A firm must have robust governance arrangements, which include a clear organisational structure with well defined, transparent and consistent lines of responsibility, effective processes to identify, manage, monitor and report the risks it is or might be exposed to, and internal control mechanisms, including sound administrative and accounting procedures and effective control and safeguard arrangements for information processing systems.[21]Page 4 sets out the principles for business which include: 1 Integrity - A firm must conduct its business with integrity. 2 Skill, care and diligence - A firm must conduct its business with due skill, care diligence and diligence. 3 Management - A firm must take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems. 11 Relations with regulators - A firm must deal with its regulators in an open and cooperative way, and must disclose to the FCA appropriately anything relating to the firm of which that regulator would reasonably expect notice.[22]Chapter 15 deals with notifications to the FCA. Section 15.6.1 states: A firm must take reasonable steps to ensure that all information it gives to the FCA in accordance with a rule in any part of the Handbook (including Principle 11) is:(1) factually accurate or, in the case of estimates and judgements, fairly and properly based after appropriate enquiries have been made by the firm; and(2) complete, in that it should include anything of which the FCA would reasonably expect notice.[23]Section 15.11.6 requires in respect of disciplinary action against traders that: If a reason for taking disciplinary action as referred to in section 64C of the Act (Requirement for authorised persons to notify regulator of disciplinary action) is any action, failure to act or circumstance that amounts to a breach of COCON, then the SMCR firm is required to notify the FCA of the disciplinary action. [i.e. the regulatory reference] The Precious Metals Desk[24]The Precious Metals desk trades four different metals, gold, silver, platinum and palladium. The respondent’s PM Desk held four books, London Forward, PM Options, London Spot and Hong Kong Linear. Forwards were held on all four books. The agreed limit for forwards was 25,000 lots in total across all four desks, at the time of the matters to which this claim relates. That limit was discussed with Mr Botting and Mr Mostachfi and validated with the market risk committee [D1634 and 474].[25]The two major centres for gold trading are the London Gold market and COMEX (which is part of the Chicago Metals Exchange (CME) group, located in New York). Gold is traded in two principal ways. First, by buying or selling gold which delivers the metal as soon as possible, in the London gold market. This is called ‘spot’ (or Over the Counter - OTC). Second, buying or selling gold at a priced fixed today but which does not deliver the metal until some future date. This is called a forward or future. The standard gold futures contract represent 100 troy ounces of gold. Each such contract is referred to as a ‘lot’.[26]On expiry of a Futures contract, the contract is enforceable as between buyer/seller and the Exchange. Under the exchange rules, traders must either deliver or exit all positions by buying or selling back to the market by the last business day of the month.[27]This means that a buyer (with a ‘long’ position) is obliged to take delivery of the metal, and a seller (with a ‘short’ position) is obliged to make delivery. In the gold Futures market, the active contracts are February, April, June, August and December. 28 ‘Closing a position’ means taking an opposite position in the same futures contract which has the effect of cancelling out the initial position. ‘Rolling/switching a position’ means instead of making/taking delivery of gold bars at the end of a futures contract, a bank buys back the future it has sold and sells the next month’s future. The cost of rolling over a Futures contract is called the switch price (also referred to as the spread), and describes the cost to roll over: e.g. the Apr-Jun switch price is the cost to roll over from April to June. ‘Squaring or flattening’ a position means that instead of making/taking delivery of gold bars at the end of a futures contract, a bank just buys back the future it has sold without selling the next month’s future. Most contracts are rolled, with the result that the investor takes the gain or loss arising from the cost of rolling, and rolls their position to a future month.[29]An Exchange of Futures for Physical trade (EFP Trade) is a trade which allows one party to swap a Futures contract for the underlying spot commodity, in this case gold. The EFP is the price of refining and delivering the gold from London to New York for settlement, or vice versa. Gold traders also use the term EFP to refer to the difference (or spread) between the spot price and futures price. In geographical terms, the spot price is the price of physical gold in London in the present, and the futures price is the price of physical gold delivered to New York at the relevant date in the future. The respondent’s London PM Desk[30]The London based PM Desk in 2020 consisted of four traders - the claimant, Louis McCauley, Joseph Ward and James Donaldson. The latter three reported to the claimant. The London team were assisted by William Benguerel in the Banks’s Hong Kong office.[31]The claimant reported to Tony Botting, Head of CEEMA EM FX & Rates Trading, Global Head of G10 Spot, G10 Forwards & Precious Metals) who in turn reported to Behnouche Mostachfi; who in turn reported to Mr Walid Assaf and to Eric Etienne (Global Head of Non-Linear Trading).[32]The claimant was primarily responsible for the London forward book, which typically traded Futures, assisted by James Donaldson. Mr McCauley primarily traded Options on the London spot market, assisted by Joseph Ward. During Asia time, Mr Benguerel in Hong Kong helped to manage the forwards book. Mr Assaf reported to Thomas Spitz, Global Head of Hedging and Investment Solutions[33]Trading is an intense exercise. The claimant used seven and a half screens (the half screen being shared with Mr McCauley) when working for the respondent. These are used to keep a close watch on any movements in the market. A trader needs to stay at their desk most of the day during trading periods to keep watching for any movement in the markets. If a trader needs to take a break of any description, a colleague needs to take over whilst they are away from their desk. Mark to Model/Mark to Market Valuation models[34]There are two principal methods used by banks to value a book – Mark to Market and Mark to Model. In a Mark to Market valuation, the valuation of a bank’s portfolios is based on the market closing prices, every day. Those prices are input into the system to produce the valuation of Profit and Loss (PnL). The purpose of the valuation is to ensure the Bank’s positions and PnL is accurate and up to date.[35]By contrast, in a Mark to Model valuation system, a theoretical price is used to achieve a valuation. The model implies a theoretical price to certain instruments. If the theoretical price diverges from the market price, the theoretical price needs to be recalibrated. At the time of the matters with which we are concerned the PM Desk used theoretical prices to value PnL rather than being pegged to the actual Exchange market. This was described for example by Mr Assaf, as a mark to market model but using theoretical rather than actual prices. For shorthand below, we refer to the PM Valuation method as ‘Mark to Model’. The PM desk was the only desk in London to use that valuation model. All other desks used actual prices to value PnL, i.e. Mark to Market.[36]The software system used by the Bank to manage risk is Murex. That is accessible to the front line traders, to the Market Activity Monitoring department (MAM) and to senior managers. MAM is known in SMCR terms as the ‘second line of defence’. Traders are known as the ‘first line of defence’ The Precious Metals Valuation Policy[37]The Precious Metals Valuation Policy states, under the heading ‘General Principles: The valuation and the reserves are calculated independently by MAM on the basis of the rules defined in this document, and in accordance with the methods and procedures validated by the Valuation Committee. On a monthly basis the results and parameters used for their calculation are presented for validation to the Pricing Committee, which opines on any exception or corrective measure proposed by the attending parties. …[38]Under the heading ‘B. Revaluation Marks’ the Policy states: The valuation of the portfolio is marked to market and performed by MAM by feeding Murex with the revaluation marks, which are directly available in the market and sourced from independent contributors where possible. [D787][39]The following is set out at D787-8: b) Monitoring of contango curves The purpose of the monitoring is twofold. On a daily basis, it is essential for the purposes of the Historical VaR, to build up a database of reliable surfaces in the system; misfed or non-updated data can distort the VaR. On a monthly basis the emphasis is on producing a P&L based on reliable data that is independent, to as great an extent as possible. This emphasis extends to the daily P&L that will be built using same independent parameters at the month end each time it appears feasible. … c) Futures and Listed Options: Futures and Listed Options are valued: - using the theoretical price deriving from the marks maintained in Murex, which would be used to value equivalent OTC transactions, the volatility surface will be the one applicable to the same underlying currency pair. - using settlement prices if the marks available are not independent and reliable information. - last traded price if the settlement price is not available or outside the market range.[40]These provisions make clear the process that MAM as the second line of defence must independently carry out in accordance with independent sources to produce daily PnL figures. As will become apparent below, those checks did not identify the EFP divergence in w/c 23 March 2020.[41]As will become clear from what follows, particularly the exchanges on 30 March 2020, Mr Assaf, along with all other CACIB senior managers, was not aware prior to 30 March that theoretical prices were being used to value PM Futures PnL. The Desk had come under Mr Assaf’s overall management from the end of summer 2019. Tony Botting was aware of the use of the Mark to Model valuation method and was aware of the approach of Mr Pender to MAM in 2014/15 which is discussed below. Concerns raised about the use of Mark to Model[42]In an email dated 16 December 2014, Mr Pender, the previous Head of Desk, raised the following in relation to the Mark to Model valuation method. As discussed we are starting to see more variation in the movement between OTC and Futures curves. As murex is only able to value both of these deal types against a single curve (OTC) we are concerned that this affecting the accuracy of the reported PnL and we would like find a way to reflect the price differential within the published PnL. … We are not talking about large differences but I do think it is important to try to find a solution as these numbers are likely to increase significantly as our business grows.[43]Mr Pender chased Mr Lawrence for a response on 27 January 2015 and was told he ‘had not got to it yet’. Mr Pender asked for it to be looked at when Mr Lawrence had time as he was keen to find a solution. For reasons unknown to us, no change was made at that time and Mark to Model continued to be used.[44]During 2019, Mr McCauley attended month end valuation committees on two or three occasions, to raise potential problems with the valuation model. This is discussed further below in relation to the Risk Committee meeting of 1 April 2020. The claimant was not aware that approach had been made. He was not aware of any concerns about the Mark to Model valuation method, prior to the matters raised by this case. The claimant had only ever used ‘Mark to Model’ to value the PnL of gold futures. GMD Culture Guidelines[45]The PM Desk comes within the respondent’s Global Markets Division (GMD). There are weekly meetings of GMD Comex. Attendees include Pierre Gay, Mr Spitz, Mr de Lambilly, and Ms Sqalli.[46]GMD introduced new Culture Guidelines in August 2018, due to a perception that the previous practice of employees being encouraged to work out solutions themselves – under the strapline ‘bring me solutions not problems’ – discouraged employees to come forward with perceived problems. The amended culture guidelines state: Against this backdrop, and in line with our GMD Culture initiatives and values, we want to change this approach within GMD. I strongly encourage all of you to alert your direct management, your local/regional management or the GMD Comex of potential issues that could impact our business.[47]The guidelines encouraged employees, for example to: Own your mistake Be accountable for your actions; Don’t blame others Don’t deny your mistakes; Don’t hide facts or bad news CACIB – Behaviours – Global Charter[48]The respondent’s Behaviours Global Charter refers to a zero tolerance policy in relation to discrimination. The Charter states [D2190]: Biases, whether positive or negative, affect human behaviour. A bias is an inflexible belief about a particular category of people. It’s a belief or attitude, not a behaviour. We should operate in an environment of mutual respect and professionalism, leaving our biases at the door when we come to work.[49]Later on it is stated [D2193]: Any complaints relating to non-acceptable behaviours should be immediately reported to the Human Resources Department. Data Protection Policy[50]The respondent’s Data Protection Policy gives the right to employees to access to personal data in line with their statutory rights. Personal data is defined as data in which the employee is identified or from which they are identifiable. Volcker Mandate[51]On 25 October 2019 the Respondent contends that the Claimant was identified as Head of Desk/’Supervisor’ in the PM Desk Volcker Mandate in place of Tony Botting.[52]It is not in dispute that on 8 January 2020 the claimant signed the LBF Precious Metals Volcker Mandate. This identified for the first time that the claimant was the Head of Desk. There was no formal communication to the claimant to inform him that he was now formally the Head of Desk. This is a surprising omission. Nevertheless, the claimant’s status as the Head of Desk was placed into CACIB’s Market Risks Limits System [D18-23 and D45].[53]We accept the claimant’s evidence that whilst he signed the mandate, acknowledging that he was head of desk, he did not read the document carefully, and the change in status was not noticed by him. Regardless of that fact however, the claimant accepts that both before and after 8 January 2020, he was the most senior person on the desk – in effect, the team leader, or supervisor. As noted above, the claimant carried out the appraisals for James Donaldson and Joseph Ward; and from 2019, after he joined the team, for Louis McCauley. They reported to the claimant. The claimant reported to Mr Botting.[54]The Volcker Mandate states, under the heading ‘Monitoring’: The Supervisor is in charge of performing its own assessment of P&L and monitoring of Market Risk exposures. He also receives an independent report on P&L and Market Risk monitoring prepared on daily basis by Market and Counterparty Risk department (MCR). The report is Day+1 and is based on validated positions captured in the FO tool. The Supervisor is also responsible for escalation of discrepancies between these two computations. [D22] No such discrepancies were reported to the claimant by MAM during the period 23 to 30 March 2020. The claimant’s job description[55]The claimant signed an updated job description naming him as an Executive Director on 14 February 2020. This states that the claimant is a Trader and Executive Director reporting to Head of FX Linear Trading (Tony Botting). Under the heading ‘Management and Reporting’ it is stated:• Report Daily P&L, risk and key market movements to management by email• Report to the Head of FX Linear Precious Metal Trading on an informal basis on the progress of the business and specific issues.[56]Under the heading ‘Mandate’ it is stated: Ensure strict compliance with the mandate attributed to the desk.[57]Under the heading ‘Risk it is stated: Ensure adherence with regard to position and risks limit.[58]Under the heading ‘Communication’ it is stated: Ensure that the relevant managers are made fully aware in a timely fashion of all matters that might have a material impact on the desk FX Linear Precious Metal group performance, risk position or compliance with legal or regulatory requirements.[59]The claimant was also required to comply with all applicable conduct rules (including COCON). Louis McCauley’s job description was identical, save that his stated that he reported to ‘Global Head of Precious Metals’. The claimant accepted that this is a reference to him. Covid-19[60]On 4 March 2020 the FCA issued a Statement on Covid-19. This confirmed: We expect all firms to have contingency plans in place to deal with major events. Alongside the Bank [of England] we are actively reviewing the contingency plans of a wide range of firms. This includes assessments of operational risks, the ability of firms to continue to operate effectively and the steps firms are taking to serve and support their customers. We expect firms to take all reasonable steps to meet their regulatory obligations. For example, we would expect firms to be able to enter orders and transactions promptly into the relevant systems, use recorded lines when trading and give staff access to the compliance support they need. If firms are able to meet these standards and undertake these activities from backup sites with staff working from home, we have no objection to this.[61]The Covid-19 pandemic affected global financial markets. The pandemic caused significant instability in the financial markets. The specific effect on the pandemic on Gold trading is discussed further below.[62]On 9 March 2020 Behnouche Mostachfi sent an email to all traders within Global FX Trading headed: ‘P&L, Positions and Franchise in these volatile markets’ urging caution and, amongst other things, stating: Please be reminded that in these volatile markets … traders first priority remains protecting the bank’s P&L, ensuring positions are appropriate with traders views and markets behaviour while respecting all limits and finally, providing CACIB’s franchise with the liquidity available to traders, so that traders can remain on top of their own risks and would not find themselves in positions they would not choose to be in.[63]The World Health Organisation (WHO) officially declared a pandemic on 11 March 2020. UK Government work from home advice – 16 March 2020[64]On 16 March 2020 the UK government issued work from home advice. This led to a telephone conference call the same day between Ian Rowland, Local Head of GMD UK, Thomas Spitz and all GMD staff announcing the COVID measures that would take effect from 17 March. The claimant did not attend that conference because he was on annual leave that day.[65]Mr Rowland said during the call: We will implement three types of set up, in addition to the BCP. So, some people will continue to remain in Broadwalk House and in our BCP site in Mansell Street. Secondly, we will trigger working from home for activities that do not require monitoring, or have significant infrastructure or operational risks, and thirdly, we will also introduce rotations for some staff within business areas between home and office. These will be weekly, so that will involve working one week at home, then one week in the office and then one week at home again.[66]There was nothing to stop ad hoc arrangements, as reflected in the following statement made by Mr Rowland as the meeting concluded: So if there are no other questions, again just to be clear there’s probably a lot of information there, please contact your direct managers, they can tell you exactly what the plan is for your particular desks[67]Mr Spitz was on the call and stated: … our number one priority is maintaining, minimising, after the health of our staff which is our first priority, minimising any operational risk. …[68]On 17 March 2020 the claimant again signed the LBF Precious Metals Volcker Mandate which named him as Desk Head. Again, there was no formal change to the claimant’s Job Description and no formal notification that his role had changed.[69]On the same day, Mr Mostachfi sent an email to Tony Botting and other direct reports requesting a reduction in the FX and PM risk limits given the increased level of volatility, wider spreads and reduced volumes. Ian Rowland emailed GMD staff regarding remote access for staff advising that staff should disconnect from work systems when not required.[70]Also on 17 March 2020, an email was sent by Mr Mostachfi to Tony Botting and Neil Maddocks, stating that the vega limits for amongst others, the PM Desk, was to be reduced by half. The Contango limit remained the same.[71]Mr Mostachfi also emailed Tony Botting and others, with the subject heading “Metals rotations”, confirming the split rota of working from home/in the office. PM Desk Team rotation - 18 March 2020 onwards[72]The PM Desk team rotation began on 18 March. Between 18 and 20 March 2020 the Claimant worked in the office and Joseph Ward worked from the alternate site at Mansell Street. Louis McCauley and James Donaldson worked from home.[73]On 19 March 2020, Mr Mostachfi sent an email to all traders within Global FX Trading and others headed: ‘Liquidity, Staffing and eTrading’ urging caution and, amongst other things, stating: In these exceptional circumstances where we are faced with very rapidly deteriorating market liquidity, similar to the worse periods of the 2008 financial crisis (but just occurring much faster) and staffing shortages due to the isolation policies linked to the pandemic, CACIB’s senior management’s message is clear that traders first priorities are to protect the bank’s positions, and ensure our positions remain liquid and manageable in nature and in size at all times.[74]On the same day, Tony Botting forwarded to the Claimant and other direct reports an email from Mr Mostachfi emphasising the need to protect the Respondent’s position and P&L and instructing traders to reduce all flows and to reduce operational risk and all non-core risk reducing flows, operational risk and all non-core risk. The covering email stated: “If there are any issues or concerns let me know. The number 1 priority is CA-CIB and we have to be prepared for any eventuality.”[75]A telephone call took place between Tony Botting and the PM Desk on 20 March 2020 in which, amongst other things, Mr Botting noted that liquidity was challenging, and the desk should be alert to heightened risk profiles or anything which needed reducing. Mr Botting noted that the Claimant was in charge, and any concerns should be raised with him: [What] I do expect is for everybody to work as a team under Sam's management and Sam is the boss, he is in charge of the metals both here and also globally, if anybody has got any concerns they can always raise it with me, I'm always here to help, but the first port of call should be Sam. If problems can't be sorted out, come to me. The Gold Volatility Episode or EFP breakdown[76]Between 23 and 27 March 2020, the EFP (i.e. the difference between the price of spot gold and gold futures) increased to unprecedented levels. Typically, due to the relatively low cost of shipping between London and New York, the difference was plus or minus $1 to $2 when the contract was approaching the delivery window (although it could vary more widely in the middle of the contract period).[77]The Covid-19 pandemic led to a much greater dislocation between the two prices, for a number of reasons. These included:-77.1 reduced flights between London and New York;77.2 the market in general was in a state of panic;77.3 increased social distancing measures creating a bottleneck;77.4 the FCA introduced limits on the number of people allowed in the office at any one time;77.5 major refineries, which converted 400 troy ounce gold bars used by London into 100 troy ounce bars used by New York, shutdown for two weeks from 23 March, bringing concerns about delivery on April futures; and77.6 travel bans.[78]At its maximum, on 24 March 2020, the difference between the spot and future price (on the April contract) was USD +80 per troy ounce of gold, which meant that for every ounce of gold that CACIB was obliged to deliver, it would cost USD 80 more to buy back the future which is USD 78 (or 40 times) more than would ordinarily be expected.[79]Attempts were made to reassure the gold market by the London Bullion Market Association (LBMA) and the Chicago Mercantile Exchange on 24/25 March. These included that there was no longer a need to change the size of gold bars (by melting down and re-forming the bars), on delivery to COMEX. 23 to 25 March 2020 – continued team rotation[80]Between 23 and 25 March the claimant worked from home. Louis McCauley and James Donaldson worked from the office. Joseph Ward worked from CACIB’s BCP site as well as from home, using a Home Trading Platform (HTP) kit provided by the bank. At the time, there were only a limited number of such kits available. Mr Ward was the only member of the PM Desk to be given such a kit at that stage. In any event, Mr Ward struggled to use the kit due to teething problems with it.[81]When he was working from home, the claimant’s access to the data needed to assess the state of the gold market was much reduced. The claimant, like the other team members, had access to a company mobile. He could access and contribute to Bloomberg chats with the team. No live free information was available on the internet. Bloomberg shows ‘live’ futures prices but we accept the claimant’s evidence that quite often the indication price in Bloomberg can be quite different to the live market price. The latter is only available to those paying a subscription, and accessible to the bank’s traders on equipment available only, (for most including the claimant), in the office. As noted above, when in the office, the claimant used 7.5 screens which enabled him to have a much greater ‘feel’ for the market than when he was at home.[82]In the early stages of the pandemic, there were issues with the capacity of the bank’s server. This is reflected for example in an IT Service Alert referring to: ‘multiple email delivery delays occurring for some users in the last few minutes. Many mails were backlogged, believed to be due to excessive antivirus scanning. There is a backlog of Outlook email which is being rapidly reduced and normal operation should be restored in the next few minutes’. [D2206] The claimant also had limited access to risk management tools – Murex and risk management. Whilst those could be accessed on his company mobile, they were extremely difficult to read on a small screen.[83]Inevitably, in the early stages of the pandemic, the bank struggled with IT issues. Mr Assaf was open and frank with the tribunal about logistical issues with IT in the first few weeks. The respondent had to adjust systems, bandwidth, and networks to be able to support a much larger number of people connecting to the bank’s systems remotely. Following the claimant’s suspension, more HPT kit was made available to staff when working from home. 23 March 2020 Bloomberg chat[84]On 23 March 2020 the PM Desk traders and the Claimant engaged in Bloomberg chats and exchanged emails in relation to the gold EFP figures, the volatile market and poor liquidity. On that day, James Donaldson – referred to a ‘crazy move’ in the EFP [D153].[85]At 7.21 am Joseph Ward stated: ‘The group faces a lot of losses on this efp. What do you think we should do’ to which the claimant replied: ‘calling you’. The call was made via the claimant’s Samsung smart phone. It was suggested by the respondent that the claimant was trying to hide the advice given on the call, by using his personal mobile, instead of putting the advice in the chat or calling Mr Ward’s office number. We accept the claimant’s evidence that he had quickly searched his mobile, found Mr Ward’s mobile number, and called that. The purpose of the call was to communicate with Mr Ward in the most efficient way possible. During the call, the trade was discussed, and Mr Ward took action on the basis of their conversation. We find that there was no intention to deliberately hide the content of the call from the Bank.[86]Joseph Ward stated in an email sent on 23 March at 19:04: The single greatest risk we face in my opinion is the efp. Until further notice I think we need to the best offer for spot and use every opportunity we can (fixings, delta hedges, etc.) to reduce ego shorts. There are many reasons to believe this trade is over and not just for Aprils. Given reduced worldwide travel and shipping market participants who can perform the physical arb may no longer be able to. This means we could see the same situation in june if the world is in a similar state. In addition, margin is up and banks want risk to be at a minimum. The last point could work in our favour and may mean a majority of shorts are closed now. Let's be all over this and keep communicating. Let's also not be afraid to close it down, even at these levels, if it means protecting the house. [153][87]While this may have been primarily a reference to the Options Book, the comments were equally applicable to Futures. 24 March 2020 calls and emails[88]On 24 March 2020, 7:11 am, there was a telephone call between William Benguerel and the claimant. The shift in the EFP was discussed during that call. During the call Mr Benguerel described the shift as ‘a disaster’ and as ‘insane’ [D190]. It was apparent that the Options desk was going to make a relatively small loss before the end of the month, and the situation was managed as best it could be, in order to minimise any loss. That was the priority at that time.[89]Later in the day the claimant also spoke with James Donaldson. The claimant spoke about a ‘lot of noise’ in the market. Mr Donaldson described it as ‘carnage’. There was a discussion about the proposal by LBMA/COMEX to accept large sized bars which it was expected would calm the markets. They agreed to ‘give it more time to see’ and ‘worst scenario … we switch June to August at a cost’. The April futures contracts were not an immediate worry to the PM Desk at this time since they had already been switched.[90]On 24 March 2020 Tony Botting forwarded his direct reports (including the Claimant) an email from Thomas Spitz [D216-7] which stated: All, over the past couple of days we have had a few issues regarding books not marked accurately We would like to remind everybody a few things : - It is the responsibility of each head of desk to make sure their positions are properly marked daily - In the current market it is not surprising that there may be some issues marking accurately given market illiquidity. - In these situations it must be explained and documented properly to the relevant head of trading and discussed with MAM/DRM - Also as a reminder on a daily basis the heads of desk are responsible to check their PnL explains and make sure differences with MAM are investigated immediately[91]When Mr Botting forwarded the message to Heads of Desk/Books, he stated: Can you please ensure attention is paid to the below. If there are any concerns flag it early and we will deal with it with assistance of MAM/DRM. Shortly after he added in an email to the claimant alone: This is esp important on options. Please make sure everything is ok with this futures move as well.[92]The reference to the ‘futures move’ was to the EFP dislocation which the email indicates Mr Botting was aware of. In a reply sent about 30 minutes later at 16:19, the claimant told Mr Botting: We use daily premex reval to mark forward, and trader mark option curve ourselves. Both forward and option curve are checked by MAM on daily basis, and we are not seeing any major failure so far. Yes today Futures gapped higher than OTC spot gold due to refineries closure worries. But murex treats future as outright forward and apply the same forward curve, we will square or switch any contract before first notice day (as we don’t take delivery), and we are nearly flat in April GC and PT by the end of today, first notice date is 31 Mar.[93]In so doing, the claimant was indicating that for April, the remaining positions were small and manageable and were covered. He did not consider it necessary at that time to say anything extra about the June Futures. The email also indicated that in the claimant’s mind, the Bank used Mark to Model, not Mark to Market to value forwards. He did not mention the number of lots they were carrying as forwards (about 15,000) but that figure was not mentioned as a risk factor in any of the risk limits. The use of forwards to hedge positions was standard practice. The claimant had squared (or closed out) all April Futures contracts in the Global Forward Book by 20 March 2020, and the whole team had reduced the total Futures exposures by almost 40% from 25,000 lots to 14,977 lots as of 30 March 2020. The lots limit had been increased by Compliance to 25,000 in the second half of 2019. That followed following a request by Louis McCauley which was supported by the claimant and Tony Botting. This is a crucial email to which we will return in our conclusions.[94]Shortly after the email to Mr Botting, the claimant spoke with Mr Donaldson [D218]. The claimant said during the call: What a day, what a day. I know sometimes if banks say mark year differently, then it’ll be a disaster.[95]The claimant was asked what he meant by this during cross examination. The Claimant told the tribunal the comment did does not make sense to him, he could not explain what he meant by it; but that he was not referring to mark to model/market. The rest of the call related to remaining trades over the next few days. At the end of the call Mr Donaldson stated: So I’ll roll the last of your stuff and I’ll probably aim, I’ll leave in order to do mine and then that’ll be that. Then we’ll move on to June’s [laughs]. Bloomberg chat – 25 March 2020[96]During a Bloomberg chat on 25 March Mr Ward remarked: I think we are getting close to us shutting this whole thing down. Our health is more important and we have the unique position of having done well thus far.[D456][97]By this stage the LBMA and CME announcement that there was no longer a requirement in the short term to convert 400 oz gold bars to 100 oz gold bars appeared to have calmed the market down slightly. Mr Assaf’s visit to the PM Desk – 25 March 2020[98]During 25 March 2020, Walid Assaf visited the PM Desk to discuss the gold volatility episode (GVE). Mr Assaf spoke with Louis McCauley who responded that everything was okay; that their positions had been managed (as they had been rolled); and that there were approximately 100 lots still to roll, which would cost between USD 100,000 to 200,000 but that was it. In retrospect, Mr McCauley was not sure if Mr Assaf was referring only to the options book or the futures book.[99]For his part, Mr Assaf states in his witness statement at para 44: When I asked Mr McCauley what our position was, I was referring to the position of the PM Desk as a whole (i.e. on both the Options Book and Futures Book). I appreciate that that may not have been entirely obvious to Mr McCauley and I acknowledge that Mr McCauley may have just been referring to the position on the Options Book and may not have included the Futures Book because he may not have been fully aware of the position. If so, this was an unfortunate miscommunication. I would have expected Mr McCauley to be aware of the position on the Futures Book (even at a high level) or to have made clear that he was referring only to the Options Book. At the time, I certainly understood him to be talking about all positions held by the Desk. 26 and 27 March 2020[100]On 26 and 27 March 2020, the claimant worked from the office. Louis McCauley and James Donaldson worked from home. Joseph Ward worked from CACIB’s BCP site. We accept that the claimant spent most of Thursday trying to fix a glitch on the system. Mr Benguerel had made a trade against Mr Donaldson but in the bank’s system it was not possible to log an internal trade onto the public system. The claimant sought advice how to fix that. The tribunal takes judicial notice of how time-consuming dealing with IT glitches can be.[101]On 27 March Mr Ward stated in a Bloomberg chat: I think the worst is over; we all rolled too early is what it is. [D2147][102]But later on in the chat Mr Ward said: This will likely not work next time since everyone will now have the same plan for June. End of day emails – 20 to 27 March 2020[103]It was a requirement for each desk to send end of day (eod) emails after each trading day to their managers. EOD emails were sent by the PM Desk to Mr Botting and Mr Mostachfi between 20 and 27 March 2020. Fifteen eod emails, were sent in total, one for spot and forwards and one for options were sent during the week. These are helpfully summarised in paragraph 47 of Mr Chedin’s witness statement as follows. They demonstrate that the EFP dislocation was apparent to the members of the team but none of the eod emails mentioned the potential impact on the PnL valuation:103.1 On Friday 20 March 2020 the claimant reported ‘GC[i.e. Gold Comex in New York] efp once bid on 3.85 but given 2.00 last … I have squared April GC … and look to buy back more June GC in coming days +460k fwds +10k spot [D/974];103.2 On Monday 23 March 2020, Mr Donaldson reported ‘GC efp the main mover of the day printing +5.50 usd [D120]. The daily PnL figures were recorded as ‘+280k fwds +95k spot’ [D120];103.3 On Tuesday 24 March 2020, Mr Donaldson reported ‘GC efp the main mover of the day … printing +80 usd. Madness’. The daily P&L figures were recorded as +150k fwds and <195k> spot [D/234];103.4 On Wednesday 25 March 2020, Mr Donaldson reported ‘GC efp April once again the main mover, after trading +80USD yesterday it relaxed down to +$17 this afternoon in Ldn’. Daily P&L was recorded as ‘+150k fwds <65k> spot’ [D/420];103.5 On Thursday 26 March 2020, the claimant reported ‘GC efp stays high and volatile between +12 usd to 22 usd. P&L was recorded as +65k fwds +160k spot [D/479]; and103.6 On Friday 27 March 2020 the claimant reported ‘Late Apr/Jun GC switch traded 29 usd favour shorts, but Jun GC efp stays higher +150k fwds +30k spot’. Saturday 28 March 2020[104]On Saturday 28 March 2020, Tony Botting shared an article with the PM Desk entitled ‘When a Hot Gold Trade Blew Up, the Rush for 100-Ounce Bars Began’ with the Claimant and Louis McCauley[D565] which stated: The spread between April and June futures contracts on Tuesday jumped to $20 an ounce, meaning it cost that much more to buy metal for April than it did for two months later. That signaled more near-term demand for bullion and the need to soon have physical supply in hand. By the end of the week, though, the situation had flipped. The June contract cost almost $30 more than the April contract, suggesting that traders appetite for physical gold has subsided for now. 29 March 2020 email[105]On 29 March 2020 - Louis McCauley emailed the Claimant at 7.21 pm. The email stated: The bank has chosen to value the Futures curve using the Gold Contango curve (GOFO’s). This relationship has broken down though in the last few days. We probably value the June EFP closer to $4. Namely the bank is over representing the PnL of the metals desk by a significant amount. Considering the volatility of the EFP and the associated PnL implications as described above, I will ask Tony [Botting] for approval to come in tomorrow to fully explain the Options desk positioning, which is short circa 2500 lots of June and the very real actual Mark 2 Market implications based on where the COMEX gold futures are trading. Please let me know whether you have any issue with this. [D562][106]We accept the claimant’s evidence, on the balance of probabilities, for reasons which follow, that he did not see this email on the Sunday evening that it was sent and nor did he read it on the following Monday morning. 30 March 2020[107]On 30 March 2020 the claimant logged onto Bloomberg at home at 5.25 am. At 6.49 am, he logged in again from the office, having arrived at 6.31 am. Mr Botting had arrived at 5.52 am. Mr McCauley arrived at 7.38 am.[108]On that morning, the claimant drove into work so he did not have the opportunity to read his emails on the train on the way into the office as he would normally have done. When the claimant arrived in the office he started to trade, and had not read the email by the time he was called into a meeting with Tony Botting. In a Bloomberg chat on the Monday morning, the claimant commented that he was surprised to see Mr McCauley in the office. He would not have been surprised if he had read the email.[109]Louis McCauley spoke with Tony Botting and informed him of the PM Desk PnL valuation, arising from the EFP dislocation, if actual prices rather than theoretical prices were used. The claimant was then asked to join the meeting and subsequently calculated the PnL using a mark to market valuation. His calculations showed that due to the dislocation between the price of spot gold and the price of gold futures on 30 March 2020, had CACIB wanted to unwind all 15,306 futures contracts (by going to the market and(a) buying the future and selling the spot, or(b) buying the EFP) this would generate a loss of: 1,530,600 ounces x USD 22 = USD 33,674,200 (because the value attributed to the future by the agreed valuation method was not the actual market price). At the time, this calculation was widely accepted as generating somewhere in the region of a USD 25 - 30 million loss on a Mark to Market valuation of the PM Desk PnL. This was substantially more than the monthly loss alert limit for the PM Desk as a whole of €1 million and annual loss alert limit of €3 million. It also represents about twice the profit generated by the PM Desk per annum. Mr Botting immediately escalated the issue to Mr Mostachfi, who escalated it to Mr Assaf who escalated it upwards. We refer to the gist of those conversations below. Escalation of the PM Desk PnL issue – 30 March 2020[110]At 14.09, following the meeting with Louis McCauley and Tony Botting, the claimant sent an email to Mr Botting and Mr Mostachfi. This was sent before the teleconference and said: Gold EFP (Exchange for Physical), the link between Futures and OTC spot level, had an usual move on 24th Mar when Apr gold futures contract approaches Delivery window (From 01 Apr to 30 Apr 2020, when a future becomes a spot in theory), as some people worried about the capability of delivery after the headlines that a few Swiss refineries half production due to COViD-19 concerns (Refinery coverts LBMA standard 400oz bars to COM EX standard 100oz bar), such worry was also confirmed by the Apr - Jun switch (Jun is the next active contract) as shorts rushed to pay $20 (the average rate before 24 Mar is about short to receive $4 to compensate the 2 month carry) to roll over, but next 2 days followed by a quick reverse when short received $31 on 27 Mar. However Jun GC EFP stays very high, today traded +$23 compare to +$4 carry. [D577]… Plan to take all chance, including client flows, to reduce short position on daily basis, aiming daily 100-300 lots but avoid panic buying in current poor liquidity market.[111]During the day, the claimant also spoke with Phil Lawrence in MAM to discuss the problem with the mark to model valuation in the current market and to discuss possible solutions.[112]At 2.45pm, a call took place between the claimant, Mr McCauley, Tony Botting, Mr Mostachfi, Mr Assaf and Pierre Blondeau [D586]. At D592 Mr McCauley is noted as saying: Yep right. Like on average like I’m in precious since 1999 and there have been I’m going to say 2 of these situations one I can remember went 8 dollars and the other went about 3 and it was considered panic but this is the worst I’ve ever seen it in my life.[113]Mr Assaf stated after the claimant and Mr McCauley left the call that it was ‘a major fuck-up’. He asked: Yeah but how can we not be able to assess the damage of mark-to-market when I go and speak to these guys about it. I mean what’s, this is completely wrong, how can we be 30 million dollars out of our mark-to- market and we have no clue?[114]Shortly after he confirms: It’s Louis, Louis told me I have 100 lots on the roll and that’s it and I’m losing 200k he said and I told him I have a friend at another bank who is losing his head off this thing he goes no no we’re okay.[115]At 3.42pm on 30 March Mr Mostachfi had an extended call with Mr McCauley during which the latter stated: Yeah I’ve had better weekends. But you know, I hope I did the right thing because I had a very restless weekend about this trade and I spoke with my wife who’s very, very, very level headed and she said “you need to first thing. . . well at the weekend send Tony and send Sam an email to say that this needs to be reported”. I saw what happened with on Turkey with xxx and I’ve been in the market for too long to risk my reputation and it’s quarter end. . . I know how margin [clocks] work, I know how futures work and this gets. . . this gets [inaudible] very quickly and as soon as it didn’t converge I’m like we need to let everybody who is important at this Bank know about this threat. [sic] [D602][116]The call continued until 4.30 pm, during which there was a very detailed decision about what to do with the Futures contracts. The claimant, despite being in charge of the desk, was not included in that call.[117]At 4.14pm, Mr Assaf spoke with Pierre Gay, Global Head of GMD. Louis McCauley was referred to several times in the call as the person on the desk on 25 March who did not raise the problem with Mr Assaf. Several times during the call, Pierre Gay said this trader should be sacked. He said, for example: ‘This evening you get hold of this guy and you sack him’.[118]At 4.32 pm a call took place between Tony Botting and Mr Mostachfi, after Mr Mostachfi had finished speaking with Mr McCauley. During this call, the draft plan to unwind the position as quickly as possible was further discussed. At 16.20 the claimant was told by email by Mr Botting: ‘You are only to reduce risk until further notice’.[119]At 4.49 pm, Mr Botting emailed Mr Mostachfi as follows [D665]: Behnouche. Fyi a couple of points. By the 20th March, Sam had no April position . it was mainly switched to June. This was before the blow out on the 23rd. I also understand that Louis also had next to nothing in the April contract which is why he communicated that to Walid. [sic][120]Between 4.50pm and 4.56 pm Mr Assaf spoke with Thomas Spitz, Global Head of Hedging and Investment Solutions [D646]. The following exchange took place: WA - Well, no, no, I will do it, don’t worry! I'm going to call Varloot. But that one, I expected everything in that book, and every time it made money I said to Benouche go and see, and Benouche looked and said, no it’s OK I looked, whatever. But there they have, well really … that a future is not valued at the closing price, I did not expect that to still be in our systems. There’s an active future that’s trading, there is a settlement and it is not closed at the settlement price. … WA – There are two topics to discuss. There is the matter of traders that we will have to fire, so that’s clear and we have to choose how we do it, who we fire, and when…[121]At 4.56 pm, following the call, Mr Spitz emailed Mr Botting as follows: I am absolutely shocked Many times You have been asked to make sure this book was under control with very limited position The number of emails I sent re: risk apetite is also significant The guy has basically run a huge Futur position marked as forward forever without any control. He has aslo apparently lied to Walid last week I will speak to Pierre asap to let him know then we will talk. I am in a call with FCA until 1700 London time Make sure we have a detailed proposed plan ready by then. [sic][122]At 5.10 pm a conference call took place between Mr Mostachfi, Mr Spitz, Mr Botting and Mr Assaf [D656]. There was a discussion about the people on the desk. Mr Spitz stated that the claimant ‘will be let go’. Mr Botting agreed. There was also a discussion about Mr McCauley. Mr Assaf expressed reservations about him because he was the person Mr Assaf spoke to on the Wednesday and who reassured him there was not a problem.[123]Mr Assaf spoke again with Mr Spitz at 5.52pm. Mr Assaf had by that time spoken to Etienne Varloot, Global Head of Risk Management. WA: Listen I spoke to Etienne … He said he didn’t see this one coming and I said me neither. So with the futures, he didn’t know they were wrongly valued in the system. TS: Me neither WA: Errr. . . Me neither. There you go. So, he wants to understand in a bit more detail [D673][124]Etienne Varloot and Mr Spitz spoke at 5.56pm. The following was said: TS - I am really furious. I'm sorry, something like that shouldn't happen. EV - Yeah, I agree. [For] us, it’s not normal not to mark futures at the future price. That sounds completely crazy to me. Following a discussion about whether to keep the futures position until the EFP stabilised, or sell it now, Mr Varloot stated: So we have to ask ourselves the question because we are not going. . .. You see, I don't think I'm going to make you cut., or selling the exposure or keeping the[125]Mr Spitz spoke with Carlos Molinas, then Global Head of Compliance, at 5.39pm: Carlos - But how could he hide the loss Thomas - He didn’t h. . . because in fact, so, that’s the point, in the bank system, it closes it in Murex, and Murex, for a reason I do not understand, I did not even know, they do not value the future. They value the future at the same price as cash. Because there is only one value curve. Yes, well, I have learned more about our trading system for precious metals today than in ten years. Because in fact the future is not valued in Murex. It's incredible! It's incredible! [D693][126]A lengthy call took place between Mr Assaf and Mr Mostachfi between 6.54pm and 7.24pm. Mr Mostachfi suggested: ‘someone like Varloot will spark things off’; to which Mr Assaf replied: WA: I don’t think he will. . . well. . . I don’t think there’s much intent to spark things off because they know that they have messed up too by not having a correct valuation for these things. … WA: So. . . there, we just need to keep calm. We need to understand what the real position is and how this position can be managed, if need be. Afterwards, yes, I think that we won’t take much additional volatility, well, everyone will get excited at a certain point, but. . . So we have to reduce, definitely, but we need to have a reduction plan instead of just doing a fire sale, if you like BM: Oh no, I don’t think they’ll do it, they’ll do it, we’ll do it as a fire sale, because if we do it as a fire sale. . . WA: In a fire sale, we won’t be able to do it, everyone is at it, well, all the other banks are going in the same direction. BM: Mmmm. Yeah, yeah, yeah, yeah. WA: And who do you think, between Sam and the other guy, would know how to guide us as to how to do it? BM: Well, I think, the person, err. . . WA: Who has market contacts, if we need to go and ask someone for an offer, that they make us a suitable offer to exit BM: Well, personally I think Louis, because he’s worked at Citibank, at BMA... BMA, I don’t remember, er [After being asked about the claimant, BM replied]: Err. . . Sam, I think he has been basically with us for quite a long time. Then I don’t know, I don’t know, I don’t have much info about him. But his, erm, way of communicating is difficult, I always found him very vague in his communication. WA: Ah, well, yes, about 20 million dollar's vague[127]It was agreed that the claimant would be ‘sent home’ because he didn’t warn the bank about the P&L when Mr Assaf visited the PM Desk on 25 March (even though he was not on the desk at the time).[128]Mr Spitz spoke with Amaury D’Orsay, Global Head of Sales at 6.57pm. Mr Spitz told him. And we couldn’t see anything. So first of all, he never should have had 15,000 lots of futures contracts. In fact he has had an order book of trades for many years, many years! On the 1 of January, there is always the taking of the futures contract on OTC. Always! And no one saw it [inaudible] risk did not see it, [inaudible] and then also the futures contract exploded, and everything went belly-up. I already have that to manage that and then you spend years building [inaudible] and all that, and then an asshole like that, you know. [D750][129]A further call took place between Mr Assaf and Thomas Spitz at 7.27 pm. The following was said: TS - So that’s why there’s no doubt about Samuel in my mind. Well, I say what I think, we’re taking Samuel out. And afterwards, we close this mess because no one understands what we’re doing on precious metals. We lose twenty million and no one realises that we lose twenty million, we are not going to keep a stupid business like that, I mean at some point WA - The worst thing was when I called Gregoire. He doesn’t. . . well. . . he. . . ok, he’s a bit like me, he doesn’t look at the detail of that thing. But he said to me: ‘When I look at the risk, there’s zero risk on. . .’ TS - Well, yes, because there’s only one curve, yes. WA - But how Lilian, Lilian from risk management, who is deep in the deepest detail with Dimitri [a senior operational manager], when they set up this thing, didn’t they see this? He said: “I don’t know, I’ll have to talk to him.”. So…[130]By the end of the day, the PM Desk PnL issue had been escalated all the way up to the banks’ CEO, Jacques Ripoll. Discussions about the claimant’s suspension[131]At 6:31 pm there was a telephone conversation between Mr Spitz and Ms David, Managing Director and Head of Human Resources [D688]. Mr Spitz was adamant that the claimant should be suspended. Ms David stated that suspension was a serious thing and urged caution. Mr Spitz said that he would call Mr Botting.[132]Mr Spitz and Mr Botting spoke at 6:46 PM [D697]. Mr Botting suggested that the failure to report was not intentional. Mr Spitz stated that the fact that it is intentional or not is irrelevant to not telling them that they are losing money. He suggested that the actions were ‘completely dishonest’.[133]At 6.46 pm Ms David spoke with Mr Mostachfi. The following exchange took place: Ms David - Right, okay and that's where we’re sort of getting a little bit of a mixed feedback and I'll just give you what we have done, is that Tony's version of what happened seems to be more on the fence. So he said that he was in a position that he should have, he was within his risk limit, um that Sam was within his risk limit and that, as of now, we don't know whether it was the market which has caused the losses or Sam's actions that have caused the losses. Now that, that is what Tony's position is. Thomas’ position is that he was in a position, he took up a position that he was not supposed to have a few days ago and the position subsequently made a loss and he did not tell anyone and that you found out from some other source. …. Now obviously, Thomas is at one end of the spectrum and Tony's at the other. Now, it's difficult for us in HR to make a call as to whether this was something that is suspicious activity and therefore calls for suspension. Are you with me? Behnouche: Can I talk to Walid because I want to make sure, what his and Thomas' intentions are exactly?[134]Mr Spitz and Ms David spoke further at 7.11pm. In relation to the claimant, Mr Spitz stated: He lost money. He knew it, but he did not tell us. And he lost money, a significant amount of money, so well and beyond his stop loss, so, for me, that is the reason why I want to suspend him, not because he didn’t reduce his position enough. It’s because he lost money. He started to lose money three days ago and he did not inform his management, meaning Tony or Behnouche or Walid. So, I’m suspending him, because he didn’t tell us he was losing money. [D723][135]The tribunal wishes to emphasise that the actions of the claimant did not cause the respondent any loss. On the contrary, during the last two weeks of March, the claimant and his colleagues on the PM desk did all they could to minimise any losses. The loss realised by the respondent was caused by the Covid-19 pandemic which resulted in the subsequent EFP dislocation. We shall return to this point in our Conclusions.[136]Ms David suggested waiting to hear from Mr Mostachfi. Mr Spitz replied that they needed to do something that day; and that Mr Assaf: ‘wants the guy out anyway’.[137]At 8.04 pm Mr Spitz spoke with Mr Mostachfi: TS: Yeah, I talked to Anita who says you are not in favour of suspending Samuel and I don’t understand why. BM - Oh. . . er., we will just say he can’t come to the office. I don’t know whether ‘suspension’ is the right word to use legally right now TS: Well in my opinion, given he lost a significant amount of money Wednesday, Thursday, Friday and Monday and is not telling us about it, this is clearly, it’s clearly a case for suspension because he hid a loss he had on his books, which, due to a marking method that is not right, but that he knows perfectly well, doesn’t show on the bank’s books and doesn’t warn its management. So, in my opinion, it’s a suspension. … BM But it’s true we don’t want him to come to the office and. . . um. . . trust has broken down, obviously. TS: Anyway, we’re going to fire the guy …. [D754-5][138]At 8:07 PM, Mr Spitz spoke again with Ms David. In relation to the suspension he stated: He knew that there was a shortcoming in the way of the system were [inaudible] at mark to market. . . that marking of position. He knew that given what has happened [inaudible] the shortcoming variation [inaudible] had no impact. He knew that since Wednesday, these shortcomings, variation of position, created a big difference between what P&L was coming out of the system, and the risk [inaudible]. He knew it completely and he [inaudible] failed to escalate it on Wednesday, Thursday, Friday, Monday. And on Monday, someone working for him on the floor came to see Tony to ask if [inaudible] had the position that was mismarked. And then, we investigated. So, for me, I'm comfortable with that, because as head of the desk, you're responsible to proper escalate any marking issue on your books.[139]Ms David agreed that the claimant would be suspended and steps were taken to implement the suspension the following day. Suspension of the claimant etc – 31 March 2020[140]On 31 March 2020 the claimant was suspended pending investigation into allegations of potential gross misconduct and breach of the respondent’s policies and procedures. He was informed that a disciplinary investigation would take place.[141]CACIB’s first financial quarter ends on 31 March 2020. Steps were taken to ensure that the accounts posted that day accurately reflected the PnL on the PM Desk using actual prices rather than theoretical prices.[142]At 22.18 on 31 March, Mr Mostachfi wrote to Mr Assaf asking for his comments on a summary report for ‘Control Permanent’. In relation to front office staff the draft stated: As Walid Assaf saw the futures divergence last week (on Wednesday 25th March), he questioned the traders on the desk and Sam Yang did not mention the potential mark-to-market issue. Louis McCauley was off last Thursday and Friday (26th and 27 March), and was supposed to be off on Monday and Tuesday (30th and 31st March) as well, but requested from tony to come to the office on Monday where he exposed the problem to Tony Botting who escalated the issue to Walid and Behnouche. Given the size of the mark to market issue, management was astounded that Sam Yang had not reported such issue, and as a result, it was decided to suspend Sam Yang until a formal investigation was performed. (sic)[143]Mr Assaf did not spot the error in relation to the Wednesday 25 March visit and agreed the draft. It was subsequently forwarded to a number of senior people within the Bank including Mr Sebastien, members of the Risk Committee and Ms Sqalli.[144]As will become plain from what follows, that paragraph was the subject of an amendment by Mr Assaf on 14 April 2020, in reply to an email from Mr Mostachfi sent on 10 April 2020 referring to a possible ‘discrepancy’. That was subsequently forwarded to a number of senior people too including Mr Spitz, Mr Reynier, Ms David and Mr Molinas. The error continued however to be repeated as set out below, even after that correction had been made. UK Risk Committee meeting – 31 March 2020[145]The respondent’s UK Risk Committee met on 31 March 2020. The minutes record the following lessons to be learned:• as highlighted by this crisis, complete review of the valuation policies across product line will be performed in order to ensure that no other Future/listed contracts are valu[ed] using theoretical price without close monitoring.• Communication is key: communication must be fluid on both ways FO vs RM/MAM.[146]Also on 31 March 2020 the claimant emailed Nicky Smith in HR with his initial response to the allegations against him [D963].[147]Further on 31 March 2020, during a telephone call between Mr Molinas and Mr Spitz at 11.49 am [D842], concerns were expressed that a theoretical price was used when the futures have a price. Mr Spitz stated: In fact there is always a spread of 1 dollar on the contract, between the two and as it never moves, it is worth 1, at least. . .well that’s how it is! It’s completely fucked-up.[148]At D844 Mr Spitz is noted as saying: Well, no, but there will be a Rule Breach Committee and we will see what he will have to say but personally my recommendation will be to fire him. One cannot mess about; I do not see what excuse he may have for not disclosing that he had a loss.[149]He also confirmed that Mr McCauley would be used to ‘settle the position’ and ‘after we will see exactly what he knew, what he did not know, when’. Mr Molinas remarked in relation to the claimant: ‘If there was a conduct breach, then he is marked, that means that he will no longer have a career afterwards. Mr Spitz responded: ‘His career is not my concern’. Risk Committee Meeting – 1 April 2020[150]A further meeting of the Risk Committee took place on 1 April 2020 which Philip Cooper attended.[151]Mr Mostachfi stated during the meeting [D2247]: So as the futures mar.., er moved basically Walid Assaf went to the desk and asked the, the, er, Samuel Yang you know what his positions were and whether he was affected by that move. But Samuel said oh no we’re fine, and he, he was mentioning that with regard to the April contract, which yeah they had already unwound. So in that he was correct. But he omitted to say, at the same time, that if we had had a large move, and we had had a large move, and if we were marking our futures to where the futures market was then there would have very, there would be a very large loss in the, in the books. For the record, we were far below our er the risk limits that er that the bank had, so there was no foul play from er from er Samuel, you know there was no rogue trading, he was not over limits, he had followed procedures etcetera, etcetera. But he failed to disclose very important information that management should have been aware of.[152]Mr Mostachfi further stated during the meeting [2253]: Ok, um, that’s a good question, actually Louis had come to at least two or three of the month end valuation committees, where I had been present, you know so at month end each time, requesting that the futures should be marked on the futures close. So that debate had happened between the front office and MAM, where front office and Louis specifically had asked for a change of method, methodology which at the end was not accepted. So that um, er debate about markings and stuff like this had er had happened The Bank rejected the change at the time because it would have cost $50,000 to implement it.[153]Later in the meeting Mr Mostachfi stated: The point on this one, is because we couldn’t see the sensitivity to that basis no one was monitoring it, er, er really. So you see, once we see a sensitivity we follow it, MAM follows it, it’s in their systems, it’s on their radars, it’s on our own radars etcetera, etcetera, so there is a lot of discussions. … The problem on this specific one was that because we were not seeing the basis it was not monitored. Which is a weakness, you know, it’s not an excuse at all. It’s just er something that we didn’t have on the radar because we were not seeing it. That is why we are putting the right systems into place. Not only to follow this one but anything that could look like this in any shape or form, be it on precious metals or on FX within the same Murex FCO system. [D2254][154]Hubert Reynier stated: Maybe before we close, I mean maybe just as a general conclusion. I think that er and I guess this is something we all have in mind already but I mean I think it’s important to re, reaffirm it. Is the fact that in the present market conditions I think that MAM have to make some extra effort, whatever the methodologies are, whatever the, the procedures that are in place… RBAC Meeting – 1 April 2020[155]On 1 April 2020 Philip Cooper emailed Hubert Reynier to request that a meeting of the Rules Breach Analysis Committee (RBAC) be convened. He then emailed Rita Sqalli, Ian Rowland and Behnouche Mostachfi to notify them of the RBAC meeting. The meeting took place the same day, after the Risk Committee meeting [D876]. The attendees included Philip Cooper, Mr Sheldon (Head of Legal), Ms David, Mr Spitz, Mr Mostachfi and Mr Molinas. Ms David stated: David: My thinking Hubert is that the next step would need to be that the disciplinary process will run its course, the RBAC would be updated as to the overall findings and conclusions of the disciplinary process and at that point, a decision can be made by Compliance as to whether or not, depending on the facts and the conclusions, an RBAC sub-co will need to be reconvened to assess the conduct … issue and/or any regulatory notifications. Thomas: Just to make a point from a business perspective, given what we have seen of our analysis of the situation and we are more than happy to have Samuel interviewed, but the conclusion of the action can only really lead to one outcome. Which will be the termination of the individual. This person is not coming back on my trading floor to be clear.[156]Ms David responded: Thomas: I can entirely understand where you are coming from on that, I just think we need to follow the process to both protect the Bank, to protect you guys and to give this individual the right to be heard, and then the facts will lean as to whatever decision needs to be taken. But I think we, I would caution against pre-emptive recording of decisions before the process has been conducted.[157]Mr Spitz further stated [D877]: I know that on Wednesday Walid was on the desk and Louis failed to mention one day last week, and I know Walid spoke to him, and he failed to mention that there may be problem with the book of that trader. But to be fair I am little bit, I am quite on the fence on this one and I would find, so this one may take a bit more time to analyse and I would have a tendency to say that given that he raised his hand, came back to the office quite eagerly to discuss that matter, even if he was maybe doing that to protect himself, at least he did it….[158]Mr Mostachfi added [877]: One thing to take into account with regards to Louis was that both Louis and Sam were present side by side when Walid was asking these questions so maybe Louis felt that he couldn't override his boss in front of you know, his N + 2 or 3 so I don't know, it's what makes the situation really complex as Thomas was saying[159]The same factual error that the claimant was on the desk when Mr Assaf visited, when it was Mr McCauley, was repeated in an email from Pierre Blondeau to Ms Sqalli, Elena Dobs and others sent on 1 April 2020 [1089]. That email was then forwarded to others including Vincent Thierry and Patrick Papillon. The error continued thereafter.[160]David Sheldon, Head of Legal, stated: [D877] Yes just if we are, if the view is being taken that this guy Louis is um, falls within the remit of the whistle-blowing policy, OK he didn't go through the formal, there is a number of ways in which someone can be categorised as a whistle-blower, it's not just going through the compliance online tool, if he is to be categorised as a whistle-blower then yes he is entitled to the protections laid out in the whistle-blowing policy of the Bank, so, we must limit the people who are aware of his name, he cannot be the subject of any form of victimisation, in the short-term or the long-term, if there are, if there is a quote case to answer for his own conduct then that needs to be very very carefully managed, not saying you wouldn't do it, but it does need to be taken into, an extra layer of concern and caution, as to how we would proceed on that. It doesn’t mean we can't do it, it just means that it’s a finer line of the protections that he is afforded.[161]Ms David remarked that she expected the disciplinary hearing manager to interview Louis McCauley.[162]On 3 April 2020, CACIB introduced a policy regarding BCP Homeworking Arrangements [D893].[163]On 9 April 2020 during a telephone call between Behnouche Mostachfi, Nicky Smith and Donald McLean to discuss the need to conduct an investigation meeting, Mr Mostachfi remarked that his ‘blood [wa]s still boiling’. Despite that comment, Mr Mostachfi was appointed to conduct the investigation meeting.[164]On the same day, the claimant’s email of 31 March 2020 to Nicky Smith was sent to Mr Spitz and Mr Mostachfi, stating that the points raised by the claimant needed to be investigated. Instead of investigating them, Mr Mostachfi ‘answered’ the points himself in an email sent just after midday.[165]In a letter dated 9 April 2020, the Claimant was invited to attend an investigation meeting with Mr Mostachfi on 14 April. Three allegations were set out in the letter:165.1 your failure to escalate any concerns regarding the position held by yourself and your team in gold futures to your line manager following the EFP breakdown165.2 the potential significant negative impact to the Precious Metals NBI of approximately 25-30 mio USD as at 30th March, if the position was marked to the futures market and/or closed165.3 The failure to significantly reduce the risk profile of the precious metals in line with directives.[166]Donald McLean provided Mr Mostachfi and Mr Molinas with a script for the investigation meeting with the Claimant.[167]The clamant emailed Nicky Smith on 13 April 2020, requesting a postponement of the investigation meeting and providing information to be shared with Behnouche Mostachfi and Carlos Molinas.[168]On 14 April 2020 a telephone call took place between Mr Mostachfi, Mr Molinas, Ms Smith and Ms McLean to discuss the template script for the investigation meeting with the Claimant [D966-973].[169]As already noted above, in an email sent on 14 April 2020, Mr Assaf confirmed to Mr Mostachfi that during his visit to the PM Desk on 25 March he had spoken only with Louis McCauley and not the claimant [D999]. Yet the error continued to be repeated.[170]Also on 14 April 2020, there was email correspondence between Hubert Reynier and Philip Cooper questioning whether a report needed to be made to the FCA and PRA and if so, what and when. The day after, on 15 April 2020. a telephone call took place between Hubert Reynier, Jean-Pierre Moine, Thomas Spitz, Philip Cooper, Behnouche Mostachfi and others to discuss further CACIB’s regulatory reporting obligations. It was decided at this stage that since there were weekly calls with PRA ay that stage due to Covid, the issue would be raised during that weekly call. Investigation meeting – 15 April 2020[171]On 15 April 2020 the claimant attended an investigation meeting with Behnouche Mostachfi and Carlos Molinas. The claimant was accompanied by Joseph Ward. Notes were taken by Cari Risk. During the meeting the claimant explained;171.1 after the initial surge in the EFP, it then calmed down;171.2 he had already squared his April futures the week before;171.3 they had reduced the number of EFP lots from 23,500 to 15,000 lots in the two weeks leading up to 20 March;171.4 the April to June switch was very volatile with thin liquidity. Shorts paid +20 USD on 24th March, but received 30 USD the next day;171.5 the April EFP itself and the switch changed a lot so it’s difficult to say where the June EFP was;171.6 June came into play formally on 30th of March; that when the EFP peaked, only a very full small volume was traded, which was ‘purely noise to me’;171.7 the main risk for forwards was DV01, which reduced to flat after Mr Mostachfi’s instruction to reduce risk;171.8 broker evidence showed April EFP was traded at 3 and 2.75 USD on Friday 27 March;171.9 that buying at high levels in times of thin liquidity brings the market level higher which in turn brings more valuation pressure and it will become a vicious loop as happened in the 2008 crisis. The lesson is that market participants should not spread the panic, but do its own bit to stabilise the market;171.10 that in hindsight, he should have sent an email to highlight the EFP dislocation on 26th or 27th of March.[172]On 16 April 2020, Mr Mostachfi spoke with Mr Molinas following the investigation meting on 15 April. Both agreed that the claimant ‘has to go’. Both expressed their frustration at how long the dismissal process was taking. Also on 16 April 2020 a telephone call took place between Mr Mostachfi, Mr Molinas, Ms Smith and Mr McLean to discuss the outcome of the investigation meeting with the Claimant [D1006-1011]. Risk Committee Meeting – 16 April 2020[173]A further meeting of the Risk Committee also took place on 16 April 2020. During the meting: Behnouche Mostachfi confirmed we will introduce a new gold currency in the system to be able to have a better monitoring in place. Looks like the Team made this request last year but was rejected due to budget constraints. Benhouche advised to re-think and review our budget constraints which had a large impact on CACIB P&L (c. 35m) [D995][174]Mr Spitz asked Ms David what the next steps would be following the meeting. Ms David suggested there were two alternatives, either to start a disciplinary investigation, or go back to RBAC with a different suggestion. Mr Spitz chased the matter up again on 20 April asking ‘where we stand now’. On 22 April, Mr Spitz suggested that since it had been three weeks since the bank discovered the issue and the claimant was suspended ‘can we make sure the process is finished by end of week please’. Whistle-blowing report regarding Louis McCauley[175]Also on 16 April 2020, Philip Cooper completed a whistle-blowing (BKMS) report concerning Louis McCauley’s escalation to Tony Botting on BKMS. The report repeated again the inaccurate statement that the claimant was on the desk when Mr Assaf visited, not Mr McCauley. It also stated: The trader whose conduct led to the whistleblowing alert is subject to the HR disciplinary process.[176]Mr Cooper also emailed Anita David to notify HR of Louis McCauley’s status as a whistle-blower. Mr Cooper emailed Mr Molinas and Ms David to say that Mr McCauley needed to be treated as a whistle-blower and could not be subjected to victimisation or detrimental treatment. This followed an email from Mr Botting dated 9 April 2020 in which he had stated: I have an employee (not a direct reporting line) who escalated a serious matter to me on the 30th March. This in turn was immediately escalated by me to Senior management in London - Behnouche and Walid. He is concerned around the ramifications for his career from having done this. Perhaps we could discuss this as the individual concerned has asked if this would fall under the criteria of whistle blowing. Perhaps we could talk on the phone.[177]On 17 April 2020 the claimant emailed amendments and additions to the minutes of the investigation meeting of 15 April with Mr Mostachfi and Mr Molinas to Nicky Smith and provided a number of additional points to clarify/confirm what he had said during the meeting. 5. I understand that questions from Behnouche and Carlos in the factfinding meeting wanted to establish whether I would act differently if this situation were to happen again. My answer, now that I have seen the potential consequences of not maintaining frequent contact, would be yes. I did not fully understand what "in a timely fashion" in my Job Description meant. I believed that because my positions were June and not April positions, I did not need to escalate immediately. I would learn from this suspension that I should escalate more frequently, even in situations where I am not so sure that I need to. I would not take any risk in the future by not escalating.[178]Mr Mostachfi provided HR with responses to the additional comments provided in the Claimant’s email of 17 April the same day. In relation to the paragraph above, Mr Mostachfi responded: Not understanding the implications of a 13 mio USD potential P&L impact, not reporting to management and not respecting the monthly and yearly[179]In relation to point 6 of the claimant’s email, reproduced below, the response was: [Claimant, point 6] I want to remind Behnouche that in the past, when Tony was not around, I have escalated to him without delay, for example, explaining the technical breach of a stress limit, and reporting big PnL on those days when we had corporate lease trade, and big TRF unwinding trade etc. I do take my reporting obligations seriously. [BM Comment] The size of the futures or P&L impact though were never reported.[180]Also on 17 April 2020, the (at that stage) routine weekly telephone call between CACIB (including Mr Cooper Hubert Reynier and Mr Spitz) and the FCA and PRA. The impact of the GVE on the bank was discussed. There was no issue raised about the valuation method (i.e. mark to model) being used at the time of the incident. It was reported that the bank had to book a larger reserve of 22 million pounds [D2032 and D1041].[181]Mr Molinas also emailed Mr McCauley on 17 April inviting him to a meeting with him and Mr Mostachfi: to discuss the recent events on the PM desk, to tell how we value and consider your contribution and overall check out the temperature at the desk’. We accept the evidence in chief of Mr Cooper that as part of one of their regular one-to-one meetings, Mr Molinas (given his responsibility as Global Head of Business Compliance) expressed the view that no disciplinary action should be taken against Mr McCauley as this could negatively impact the ‘speak-up’ culture within CACIB. Mr Cooper could not confirm whether it was Mr Molinas who took the decision not to investigate Mr McCauley nor when any such a formal decision was taken at all. The above email suggests that M Molinas was very much involved in that decision. Appointment of Mr Chedin[182]On 20 April 2020 Mr Chedin attended a briefing call with Nicky Smith and Donald McLean in which he stated [D1051]: Well … his position was probably difficult to mark and that’s probably our views, and of course in retrospect we are all clever, but spot at the time, I am quite sure that the position was very difficult to mark, this being said on the other side, but probably what we need to ensure is whether all this has been this has been disclosed transparently and discussed with management because certainly the position which is difficult to mark especially in that context of the coronavirus crisis, I would say, that can happen, definitely, that's part of life, part of trading, part of the activity we're running but as soon as this kind of difficulty emerge, uh communication to management, transparency to management is absolutely key and the last thing that we want to have is to be in a situation where the trader tries to I would say to fix it, or to massage it down uh and then think maybe if I do that maybe management won't get worried and things will come back and will recover in the future so no need to raise an alert that might prove worthless in future..[183]We accept Mr Chedin’s evidence that he was not aware during the disciplinary process of the conversations between others in the bank including Mr Spitz, Mr Assaf and Mr Mostachfi, to the effect that the claimant was to be sacked. We further accept that HR did not suggest that it was necessary to consider the conduct of others, such as Mr McCauley or Mr Botting. He understood his remit to be to consider the allegations and if they were upheld, to issue an appropriate penalty. Investigation report 21 April 2020[184]The Investigation Report was concluded on 21 April 2020 and provided by Behnouche Mostachfi to HR [D1064]. This states, under the heading ‘Background to the Investigation’: Large position not disclosed in timely fashion by the Global Head of the Precious Metal desk despite Global Head of FX asking for large positions to be reduced and reported, leading to very large potential P&L swings in an unprecedented and chaotic market, and ultimately leading to large loss exposures.[185]The report stated that the persons interviewed were Tony Botting, Mr Assaf, the claimant and Mr McCauley. In fact, only the claimant had been formally interviewed. There were no formal investigation interviews with the others mentioned; Mr Mostachfi was just referring to the call at 2:45 PM on 30 March.[186]The report added a further allegation to the three set out in the invitation letter to the investigation meeting, namely: Failing to communicate the size of the Gold Futures exposure before and during the large [gold] Futures moves, even when the Global Head of FX was asking for large positions to be significantly reduced and whether the desk was holding significant exposures. That specific allegation had not been formally put to the claimant.[187]On 21 April 2020, there was a meeting of the Risk Committee. The minutes confirm that the total loss on the PM Desk following the unwinding of the Futures position was €30.3 million. The profit made by the desk of €15 million had become a loss of €15 million. The tribunal considers that it is important to stress that the loss incurred by the bank was in no way caused by the claimant. It was caused entirely by the EFP breakdown. The claimant was not disciplined for causing any loss. He was disciplined for failing to identify, and escalate the loss to the Bank if the PM Desk PnL was calculated on the basis of actual rather than theoretical prices. Even if the claimant had escalated the issue earlier, the loss would not have been any less. Further, the loss incurred resulted from the decision of the bank to unwind the positions in April/May. That was a decision for the bank to make. It was not however a decision which the claimant had any input in relation to because at that stage he was suspended.[188]Following the discovery of the position, the bank decided to reduce the number of lots held by the bank in PM futures from approximately 15,000, to 500, in a relatively short space of time, at a time of thin liquidity. That was of course a decision for the bank to take, and the tribunal pays due deference to the bank’s decision in that regard. The loss eventually realised by the respondent however, had nothing whatsoever to do with any action or inaction by the claimant.[189]On 23 April 2020, Mr Molinas met with Mr McCauley (see the email mentioned above dated 17 April 2020). No further details have been provided as to what was discussed during the meeting or as to what decisions were taken. It is apparent from the tone of the 17 April email however that a decision had been taken not to take any disciplinary action against Mr McCauley and that his position within the bank was secure. Invitation to disciplinary hearing – 24 April 2020[190]On 24 April 2020, the Claimant was invited to attend a disciplinary meeting on 29 April. The same three allegations as set out in the invitation to the investigation meeting were set out but not the fourth, referred to in Mr Mostachfi’s report.[191]Donald McLean emailed the Claimant on 27 April 2020 attaching documents that might be referred to in the disciplinary hearing on 29 April. The Claimant subsequently requested a postponement of the disciplinary hearing, which was rearranged to 5 May.[192]On 4 May 2020 the claimant submitted his ‘Disciplinary Submission’. This was said to contain the claimant’s first and second protected disclosures. This contained the following information [D1136, 1141, 1142]: When I work from home, I do not have access to market trading or internal systems, only my company mobile phone, and internal Bloomberg chat…. I have not been given any specific guidelines, nor has my team, on what to do when risk materializes when I am not in the office, or any special arrangements for information sharing…. There are two valuation methodologies on futures position among banks:- 1. The first methodology is to use the same OTC contango curve to value futures. This method has been consistently used by CACIB before I joined the bank … 2. The second methodology is to use CME daily settlement prices to value futures position. But technically CACIB system is not ready for this methodology, and it is not accepted by MAM and DRM…. My ex-line manager Stephen Pender had raised the advantage and disadvantages of each methodology back in 2015-2016, but the Bank chose not to make any change due to technical problems. Current methodology was chosen by the Bank and I have complied with them. Again, had the risk been clearly quantifiable at that time, then the Second Line of Defence would have detected and reported the exposure, which they did not.[193]Mr Chedin told us that those submissions were read by Mr Chedin prior to the meeting with the claimant on 5 May 2020, but his focus was on the allegations against him, not on the claimant’s submissions regarding them. We accept that was how he approached the matter.[194]The Claimant included in his submission a list of people to interview – namely, Phil Lawrence, Head of MAM Murex, Lilian Chaplain Head of DRM and the PMD traders James Donaldson and Joseph Ward. Mr Chedin decided it was not necessary to speak to them. Nor did he consider it necessary to consider the emails from Mr Pender in 2014/2015 regarding the valuation method.[195]Donald McLean sent Laurent Chedin a draft script for the Claimant’s disciplinary hearing, which Laurent Chedin amended and returned. Disciplinary Hearing – 5 May 2020[196]On 5 May 2020 the claimant attended a disciplinary hearing. This was chaired by Mr Chedin. The Claimant was accompanied by Joseph Ward. Mr McClean was present on behalf of Employee Relations and Laura Barker attended as note-taker.[197]There is a dispute as to how many disciplinary allegations Mr Chedin referred to. The script prepared beforehand referred to four allegations. The notes however do not refer to four specific allegations. Had four allegations specifically been put, we find it inherently improbable that the claimant would not have queried that, given that the letters inviting him to the investigation meeting and disciplinary hearing referred to three allegations only. The script also refers to the purpose of the meeting being to consider the disciplinary allegations referred to in the invitation to the disciplinary hearing letter. We find that though it might have been Mr Chedin’s intention to deal with four allegations, it would not have been clear to the claimant that was his intention or that a fourth allegation was being discussed.[198]Mr Chedin summarised the matters discussed at the disciplinary hearing in his disciplinary outcome letter, which is dealt with below.[199]On 5 May 2020, Joseph Ward sent an email to his Gmail account which stated: Granted, the switch was also extremely volatile during this time. No one here is debating what the cost to close the risk positions (mtm) was during this week - it is a basic calculation. However, it is reasonable to me as a fellow precious trader and someone that has worked with Sam since August 2016 that he thought it was prudent to wait to inform managers. With the team nearly flat April contracts and the market being mainly driven by the April contract moves (including the switch) there is a strong argument that waiting to see how the June EFP behaves when it is trading on its own makes sense. There is plenty of evidence submitted that Sam's belief was that the panic was short-term and driven by market participants stopping out of April positions and that when the June contract became the lead contract for the EFP things would settle down. Given Sam's previous record of involving managers in business and market risks I am confident Sam would have informed management the week of 30-Mar once it was clear the EFP was not calming down right away.[200]The claimant submitted his amendments to the notes of the disciplinary hearing on 7 May 2020 and provided “some further feedback”.[201]Laurent Chedin emailed Donald McLean his draft thoughts and findings on the same day [D1153-1156]. The email include the following: … the question directly asked by the Global Head of FX on the desk as to whether any significant exposure was being held should have provided a good opportunity to mention it…. … the investigation has not evidenced a deliberate willingness to hide from the desk Head. It appears to the investigation that the desk Head, because it was confident with the position and focused on the DV01 and Vega, did not consider this position as requesting, because of its magnitude and different market / product than what it was hedging, reporting to Management. This should be considered alongside the allegation.[202]On 13 May 2020, Mr McLean sent Mr Chedin some suggested questions, prior to the interview with Mr Botting on 14 May 2020. They include questions about the valuation method, about any similar past volatility episodes, and any reporting procedures or past practices in such circumstances. The questions were not asked of Mr Botting. Mr Chedin did not consider them relevant – he thought they were ‘naïve’, or ‘beginner questions’. Mr Chedin decided the issue was a narrow one. That is, why the claimant had failed to notify management of the dislocation in EFP between 23 and 30 March 2020. Interview with Mr Botting – 14 May 2020[203]On 14 May 2020 Mr Chedin interviewed Tony Botting [D1202]. During the interview, Mr Botting said the following: I worked in Asia for 5.5 years, so I’m used to working with Asian people. The cultural aspect is something you need to be aware of in terms of loss of face. They can sometimes be reluctant to agree to something that has gone on.[204]Mr Botting also told Mr Chedin: TB: There was no mention of any loss being built up. If you look at the risk highlighted in the emails, it appeared to be nothing apart from minimum risk. There was very little DVO1. He is in denial that there was an issue with the trading position. This was a once in a decade move, but if he had communicated that earlier, there would still be a loss but less. I have lost confidence in him as a manager and in him communicating the risk. I sit behind SY; the crux of matter is that there wasn't a communication. He didn't view it as risk. That is the biggest concern. When after LM had quite rightly highlighted the risk and it was escalated, SY was still in denial. Even when I spoke to HR after suspending him, he was still struggling with the loss. This has destroyed my faith in him as a manager. Interview with Mr McCauley 19 May 2020[205]On 19 May 2020 Laurent Chedin interviewed Louis McCauley [D1212-1214]. Mr McCauley was asked questions about the claimant’s leadership style and his handle on risk related to options trading. He was not asked about the gold volatility episode. Nor was he asked about Mr Assaf’s visit to the desk on 25 March. Mr McCauley did say: LM: No, because we have Bloomberg chat, everyone was always on Bloomberg. I would come in and say "Oh wow guys, you made a million this morning". I have a tool called Risk Engine I would come in and ask how did you make that money. He would say the trade is on the chat. I would need to read the chat and see what it is, on Risk Engine, I can see all the risks from all the teams. I would look at that but he wouldn't. I’m a big challenger, but he doesn't ask and doesn't challenge how we make money. [D1213] Draft disciplinary findings – 19 May 2020[206]Laurent Chedin updated his draft findings to add a ‘Conclusion’ section and emailed them to Donald McLean [D1181]. The conclusion section stated: As a result, my assessment is that the individual being the object of this disciplinary process cannot be maintained in his current position of Head of the Trading desk. The rationale underpinning this assessment is that the individual has not grown to the task of a Head of Trading by committing the above referred allegations. On the other hand, the investigation has not evidenced anything malicious or dishonest in the behaviour of the individual. If anything, it appeared that the commission of the allegation was the result of judgment calls that were severely erroneous during this severe crisis episode and of an insufficient capacity to put things in perspective by looking at the situation from one step back. Taken this into account, Management and HR should explore whether they deem relevant, appropriate and feasible to, while sanctioning the allegations that have been committed for their gravity, give the individual a second chance by: - Demoting him from his position as chief trader - Putting him in a trader position devoid of Management responsibility - Adjust the comp downwards accordingly - Train the individual and agree with him objectives to be met in term of communication, reporting and Management skills If this is deemed not feasible or appropriate, then the individual cannot be maintained in his current position of Head of the Trading desk and appropriate action has to be taken in that respect.[207]On 21 May 2020 there was a telephone conversation between Laurent Chedin and Donald McLean to discuss Mr Chedin’s draft findings [D1194].[208]Mr McClean told Mr Chedin: I’ve been keeping Anita David, the head of HR, updated... um and on your current thinking about the outcome. Obviously this is shared with. . .she’s had to speak to Rita as COO and I think Rita is going to speak to you about the, you know, the case, just to let you know.[209]At D1196 the notes record: And there is also no doubt that, [as expected. . .[inaudible] to have been appointed] as head of the desk in a sense there is no real excuse for having committed this mistake and so therefore he has to pay the price for that. The question is now, what is the right price? Is it just to dismiss him for misconduct or can we give him another chance. We have to find what the right answer is …[210]Mr Chedin continued [D1198]: It’s clear that we judge him on being desk head and we have to …dismiss him for misconduct. There is no way out of that because there have been errors of judgement which were big which happened over a period of time, which was a few days in a row. Anyone can make a [certain] error of judgement but then you would expect people to either [inaudible] to remedy the error of judgement, and say ‘ok no, that was the wrong call, I made the wrong judgment, I [inaudible] ...’. Or you would expect him to communicate with peers, colleagues and then to realise that they made an error of judgement and to remedy. Donald: Yeah. Laurent: He made a big error of judgement but he did not remedy the error of judgement not just for himself. ..no full communication with peers or with colleagues. For that reason he takes the responsibility, there’s no way out of that. That’s a big responsibility. Therefore the sanction should be actually quite big and probably the sanction is dismissal for misconduct probably. Then it’s a question of context for the bank to find that anyone agrees that [inaudible] . . .and the investigation could not find any malicious intent, it was really error of judgement, nothing malicious. But yeah unfortunately maybe it’s not. . .it’s not. . .it’s not sufficient to make a big change in our final decision making.[211]McLean advised Mr Chedin during this call that if he was sending his written thoughts, not to mention the claimant by name as the claimant ‘could put a request in to see any information’ (i.e. make a data subject access request – a DSAR). There are a number of other examples where such tactics were used including an email of 9 April 2020 from Mr Maclean to Ms David and Ms Smith [D925]; the script for the investigation hearing (sent 9 April 2020 – D948 and D950); an email from Ms Smith to Mr Mostachfi and Mr Molinas sent 17 April 2020, with the claimant’s comments on the gold volatility episode [D1047]; emails sent around 21 May 2020 between Mr Chedin and Mr McLean to discuss the disciplinary penalty; an email between the same on 26 May 2020; the draft disciplinary outcome letter between Mr Chedin and Mr McLean [D1225].[212]On 26 May 2020 a further telephone conversation took place between Laurent Chedin and Donald McLean [D1199-1200]. Mr McLean said he was aware that Mr Chedin was due to speak with Rita Sqalli, Global GMD Chief Operating Officer, but did not know what Ms Sqalli wanted to speak with him about. He stated: I know you are going to speak to Rita soon and I just wanted to, if she asks, I just wanted to confirm what we have discussed; what this may mean for Samuel. It’s not confirmed, in case she asks you, because obviously if. . .just that she will know that whatever the outcome … is, if it is dismissal or final written warning, because we have already started a process against Samuel, disciplinary process, this will be on any reference that is provided for six months. [ET Note - six years in fact, not six months][213]Mr McLean also stated: If you are. . . and just, I know that you are very diligent, but don't email maybe Rita or anyone else on this unless we have Lisa Mann, Lisa Mann from Legal copied on an email otherwise it would be something that we could have to show to Samuel.[214]The purpose of that statement was, again, to further prevent such communications being readily identifiable in a DSAR search. A similar comment was made in an email sent by Mr McLean to Mr Chedin on 3 June 2020 [D1215]. Telephone call – Mr Chedin and Ms Sqalli – 26 May 2020[215]The telephone call between Laurent Chedin and Rita Sqalli (who is still employed by the respondent) took place on 26 May 2020. After the introductions, Ms Sqalli stated [D2007]: I wanted to understand a little of where you were in your reflection on this case which takes a little time to be settled for reasons that have nothing to do with the subject ...it’s rather the current circumstances which are a little more complicated to manage.[216]The tribunal finds that was a reference to the pandemic. Mr Chedin stated [D2013]: So, as a result, that's why I’m hesitating a little: if basically the bank had done its job of training him, I would have said we must make him leave for gross misconduct and report to the FCA that there was a problem, and then, there you go, there is no doubt. There, I would say, that I think firing him for gross misconduct and ending his career, it's a bit rough because of that. At the same time, we can't leave him in his position, so in fact, I was hesitating a little between – and this is where I no longer know very well what is feasible – not feasible, – the fact of telling him “we have two options. One option gross misconduct, we fire him. Second option, we tell him ok we’ll lower your fixed salary, your bonus will be zero, you are no longer a Head of Desk, we’ll change your desk, we’ll put you at a desk where you will be trained to management clearly, and basically you’ll have to deliver within a year and at that time we’ll set your counter back to zero, you see? This is a possibility too. So what is right, or not right?[217]Ms Sqalli responded: And I understand your hesitation. I think, after all I do not necessarily know this case in detail but it seems to me that we were not talking about reporting him to the FCA…. For me, reporting him to the FCA was a little too much … Rather, it was the options to consider. It was to say "listen, I think that here, what happened is serious enough for us to have a real breach of trust from this point of view etc etc, and therefore what we are proposing is that we leave on good terms, you try to find a job elsewhere”, but we did not necessarily report him to the FCA. Me, that was my understanding.[218]A discussion then ensued about a regulatory reference. Mr Chedin stated: Yes. I understand that and I'm more of the opinion that reporting him to the FCA would be a bit harsh I admit that unfortunately, because I thought of Sam, there is one thing that bothers me. I wouldn't like him - to leave, we say to him, give us your resignation and he leaves; I wouldn't want him to show up to some bank tomorrow, explaining that he was a brilliant Head of Desk at CACIB and that he just left because he was disappointed with the bonuses. It would annoy me a lot. Because clearly, this guy is unfit to be a Head of Desk, totally unfit. I hope he has understood. But you see, I would be annoyed if he crashed another bank, and then you see?[219]Ms Sqalli replied: That particular point can't happen because they're going to do the regulatory references, you know, so they're going to ask us. We have an obligation to disclose that there has been a disciplinary that concerned him. What we can do with him - we have already done this in the past - if it is moving towards that - is that we agree with him on the wording - finally we agree, that's a wording that suits us too - but we say to him “listen, this is what we will disclose if we are asked for your regulatory references”. But I agree with you, it is out of the question that we say, when we are asked for regulatory checks, that he has a record that is clean and that he is the best Head of Desk that we have ever had. And now, as it happens, that would be doing... we wouldn't like other banks to do it and therefore we shouldn't do it ourselves…. So whatever happens, and independently of the outcome and the decision you'll make, and if I understood correctly at the minimum it's a demotion. [Laurent : absolutely] Whatever will be, it will be in his file and so it will be disclosed, not necessarily to the FCA, unless the FCA asks the question specifically about him. But there is no reason why they’ll specifically ask us, etc.. But on the other hand, if another bank asks us for his regulatory references because he wants to go and work there, we will disclose that he has been in a disciplinary, and this is where wording is important. And this is what is usually negotiated, discussed anyway, between the two parties to find a common agreement.[220]Mr Chedin replied: Agreed. OK. A priori, I will probably veer towards this solution. It’s the fact of saying in this case effectively, we dismiss him, we will disclose the fact that there was a disciplinary and the terms will be discussed, that seems to me the best solution in this case. Because in fact, I find it a little rough to report him to the FCA and maybe even a little bit unfair to be honest. And at the same time, one, we absolutely can't keep him in that position - that's totally not possible - and two, we don't want him to go and occupy the same position tomorrow with another bank.[221]Shortly after this comment, Ms Sqalli suggested that Mr Chedin should speak to Mr Assaf as she had heard from Mr Spitz that: Walid would have gone to the desk and would have asked questions, and apparently the answer that had been given to him, I guess it's by Samuel but again you’d have to talk with Walid because I think it's important, it’s “it’s fine, we have nothing, we are very light” or something like that. And as for me, what that’s what I heard and… Interview with Mr Assaf – 28 May 2020[222]As a result of that suggestion, Mr Chedin interviewed Walid Assaf on 28 May 2020 [D1206-7]. Mr Assaf confirmed that the claimant was not in fact in the office on 25 March when he visited the desk and spoke to Mr McCauley. There was a dispute as to whether or not Mr Assaf stated to Mr Chedin during that meeting that he had lost trust in the claimant. Mr Assaf could not recall that and we accept that he could not. However, Mr Chedin did recall it, and said as much to Mr De Lambilly when he was interviewed for the disciplinary appeal [D1603]. We find on the balance of probabilities that Mr Assaf did say that he had lost trust in the claimant. Indeed, between two such senior managers, it would have been surprising had there been no such discussion at all.[223]On 3 June 2020 Louis McCauley emailed the notes of his interview to Laurent Chedin. He confirmed in that email that he was Acting Head of Desk.[224]On 8 June 2020 there were two telephone calls between Laurent Chedin and Donald McLean to discuss and conclude the disciplinary findings. In a call commencing at 9.12 am, Mr Chedin confirmed that he had decided that the claimant should be dismissed, but without reporting the case to the FCA. Also: [W]e do not want that he goes to another bank and says “ah you know I was at CACIB, and I just left because I was a bit unhappy about the bonus”, right, we want people to know that he’s left upon something linked to a disciplinary.[225]At 2.31pm there was a longer call during which there was a reference to the visit made to the PM desk by Mr Assaf on 25 March: I think clearly this allegation is a, is a, appears warranted and hold it’s very clear that we have seen no sign of anything in written nor anything verbally in term of communication to the line manager. There is even worse, when the line manager came on the desk and asked whether there was something the answer was no, not this position, everything under control. [D1223] Mr Chedin admitted during the hearing that this was an error. RBAC Meeting – 10 June 2020[226]On 9 June 2020, Mr Chedin’s disciplinary findings were shared with RBAC. They were then discussed at a meeting which Mr Chedin attended on 10 June. Mr Chedin told the meeting: However, for sure we had at the early stage of the crisis, both the Global Head of FX and the Global Head of Macro coming to the desk and asking whether there was any large position, any matter of concern, any negative impact to be expected from the disruption that the gold market was experiencing and this very good opportunity to communicate things to this manager has not been seized by the desk. [D1235][227]Then later: So, therefore, I did try to find what has been reported and clearly there has been no report on that by the head of desk, including an occasion where we had global head of Macro and the global head of FX coming to the desk and asking, “guys, how are you performing in the first stage of the crisis?” “Do you have any concerns, any big position?” The reporting opportunity has not been seized, and even worse, the first communication on that situation to management did not come from the head of desk but it came from another person, the Person A. Which, indeed, shows that the head of desk has not performed any communication on that, which is, well, which is simply incomprehensible in a sense given the magnitude of the amount. So therefore, clearly, the Allegation 3 appears warranted and should hold. It’s very clear that no communication has been made on that amount. [D1241] … The first thing which is worth again to share with you and which is important for me to voice to each and every [one] of you, is that the investigation has not found any deliberate, malicious or dishonest behaviour from the head of the desk. … When we look at these three allegations, each of them, even if we take it in isolation from the two others, does constitute a major allegation as each of them refers to a key duty which is really at the core of what you expect from a head trader, which is typically informing management without delay of any material exposure and that’s even more at the time of a crisis. And that’s even more, as soon as there is any concern, any potential concern or any question which is open about the valuation of a large exposure. And clearly, this has not occurred. So, unfortunately, taken in isolation, my professional assessment is that any one of these three allegations is very serious and severe. And then the combination of the three allegations together, unfortunately I have [inferred] by the fact that they have occurred over a significant period of time. Of course, it was one week, one week that might appear to be very short period of time, but for us trading one week is a long period of time and one week during a crisis… [D1242][228]Mr Chedin told us that he would not have concluded that there was no dishonesty, if he thought the claimant was on the desk on 25 March. We do not accept that those statements are inconsistent. The notes record that Mr Chedin stated twice, in the clearest possible terms, that the claimant was on the desk when Mr Assaf visited. That misapprehension is not inconsistent with a finding that even if the claimant had been on a desk, and had not reported the matter, that was not because he was dishonest or deliberately hiding a loss, but because the claimant did not consider it was necessary to escalate any concerns. See for example the draft conclusion of 19 May, which referred to ‘severely erroneous judgment calls’ in not reporting, not dishonesty.[229]Mr Chedin went through four disciplinary allegations at that meeting, confirming that three out of four were upheld. He considered that any one was serious and severe, but that: … with three allegations which are severe when taken in isolation, have occurred in a combination of a significant period of time and then fortunately it’s clear that it’s not at the initiative of the head of desk that they’ve been interrupted. (sic)[230]Ms Sqalli confirmed at the meeting that it was GMD’s view that the claimant has to be dismissed whether as Head of Desk or as a trader: But from GMD’s view it’s of course a dismissal because we cannot have someone who has committed those kind of issues, either as a head of desk or as a pure trader. The fact that he was a head of trading at the time so for us it’s kind of clear cut in terms of I would say his future within the bank and then yes it’s true we need discuss whether it’s pure misconduct or a more, or a gross misconduct. [D1245] Rules Breach Analysis Sub-Committee Meeting[231]A meeting of the Rules Breach Analysis Sub-Committee (RBAS-C) followed the RBAC meeting on 10 June 2020, to consider whether the claimant’s conduct amounted to a Conduct Rule breach. RBAS-C concluded on the basis of a discussion around the report made by Mr Chedin that the failure to escalate came within Rule 2 – due skill, care and diligence. The subcommittee did not conduct any separate investigation itself. A potential breach of Rule 1 was considered but since Mr Chedin had concluded that there was no intent to mislead or hide the loss caused by the EFP dislocation, a breach of that Rule was not found. Risk Committee meeting 19 June 2020[232]On 19 June 2020 there was a meeting of the Risk Committee. A decision was made that PM Futures were no longer to be marked on a theoretical basis. Four new synthetic currencies were to be introduced, and a new limit on gold Futures was set at 500 lots (previously 25,000). The review had found that PM was the only part of the Bank (at least in London) using Mark to Model for the valuation of futures. All other desks (which we were told were ‘several’ in number) used Mark to Market [D1261-2]. The main reason for this was said to be the historically close correlation between the Futures and the OTC price of gold. Disciplinary outcome letter – 13 July 2020[233]On 13 July 2020 Laurent Chedin’s disciplinary outcome letter was emailed to the Claimant. The claimant’s employment was terminated with immediate effect, with a payment made of three months pay in lieu of notice [D1266- 1274]. Mr Chedin noted:• You agreed that you should not have let your uncertainty or your view of the market prevent you from communicating the issue to management and you accepted that you should have handled the situation differently.• You acknowledged that it may have been appropriate for there to have been more frequent reporting and meetings with your manager and said that you could benefit from training on communication.• You said that you did not intend to mislead the Bank, but acknowledged that you should have raised these concerns to management; you apologised for your actions. [D1268] … Whilst I accept that you were working from home on 23, 24 and 2S March 2020 without direct access to the market, and that the working conditions were new and perhaps difficult, this is no excuse for not monitoring closely and reporting duly the position of the market and the exposures of the Desk. You also said that you thought that someone else on the Desk had reported the position and exposure to Mr Botting. However, it is not enough for you to have assumed this. It was your responsibility to ensure that such a communication was made clearly and unambiguously and that your line manager was also aware of the measures taken to mitigate and contain any adverse impact on the Desk positions. … I understand that you thought that the situation was uncertain and wanted to wait until you had further information and could present a more detailed account to your line manager. However, in my view, the fact that you had such uncertainty and that you accept that EFP breakdown was "unprecedented" was precisely what should have let you to have appreciated that an escalation was required without delay. A lack of certainty should in no circumstances be an obstacle, nor a justification to delay the prompt conveying of information to your line manager. Further, you also acknowledged that you were aware that Mr Assaf had come to the Desk on Tuesday 24 March 2020 and asked the team what the positions were due to the fluctuating market and to be kept updated. You said that you presumed that Mr Donaldson and Mr McCauley, who were on the Desk at the time, had informed management of the situation. However, when pressed during the Disciplinary Hearing, you confirmed that you had not checked if this was the case. As I explained above, it is not sufficient or acceptable for you to have assumed this, particularly in these circumstances/given the market volatility. You should have checked that Mr Assaf, a member of senior management having specifically asked for an update, was fully apprised of the position. It was your responsibility as Desk Head to ensure that he was given a full and accurate account of the situation. [ET note – this is not in fact reflected in the disciplinary hearing notes]. … I do not find there was any deliberate or malicious intent on your part to conceal the position and I accept that you were confident the market would recover. However, for the reasons set out above, I find that you made several significant errors in judgment. You clearly failed to appreciate the potential significant adverse impact the EFP breakdown could have on such a sizeable position and failed to escalate this to your line manager in a timely fashion, despite having several opportunities to do so…. [ET note - Allegation one was therefore upheld] As you are aware, it is therefore also standard operating practice/procedure for all traders and, even more so the Desk Head to check the valuation model (i.e. the theoretical price produced/calculated by the model, its parametrization and inputs) regularly by ensuring that it remains properly representative of the effective Market-to-Market valuation (i.e. the price at which an effective transaction under current conditions would occur) of any significant positions held by the Desk. … It is an absolute core duty and expectation of a Desk Head that he/she identifies potential risks in a timely manner and escalates them to management without delay. As you are aware, the daily wrap email and the Desk P&L report (which used the theoretical Market-to-Model valuation prices) alone would not have alerted management to the issue. Therefore, it was incumbent upon you to perform this critical role. Despite the fact that you acknowledged that the markets were volatile, it concerns me greatly that you did not appear to have appreciated the magnitude of the potential risk and, regardless of whether or not you thought the positions would recover. It is, per se, perfectly legitimate and expected for a Desk Head to form an opinion, however, it is incomprehensible that you considered that an issue of this severity did not warrant immediate escalation to management. As set above, whilst I do not believe that you have maliciously withheld information, I am of the view that you seriously misjudged the immediate gravity of the situation and, in my view, took improper comfort from the fact that the valuation of the Desk P&L was based on the theoretical Mark-toModel price rather than on the genuine Market-to-Market price. For the reasons set out above, I uphold … allegation [two].[234]As for allegation 3, Mr Chedin concluded: Given the lack of instruction as to the size of the risk reduction required, in my view you did as instructed and did use the risk metrics available to you to monitor, assess and reduce the overall risk profile of the Book. Allegation 3 was not therefore upheld and no more needs to be said in this judgment about that allegation.[235]In the outcome section, Mr Chedin concluded: Having considered all of the evidence carefully, given the lack of deliberate or malicious intent to withhold information I believe that, whilst very serious, your conduct does not amount to gross misconduct as set out in the Bank's Disciplinary Policy or your contract of employment with the Bank dated 9 May 2011 (your "Employment Contract"). However, given your role and regulatory responsibilities, in my view your behaviour still amounts to serious misconduct. You displayed significant errors in judgment over a material period of time, which was exacerbated by your lack of action. These, because of their nature, have led to the Bank to lose trust and confidence in your ability to perform your role of Desk Head, making your continued employment with the Bank untenable. Consequently, your employment is being terminated immediately from today, for some other substantial reason, being serious misconduct. You will receive three months' pay in lieu of notice in accordance with your Employment Contract, subject to normal deductions for tax and National Insurance contributions. I have not reached this decision lightly. In coming to my decision I have not only considered the mitigating factors that you put forward at the Disciplinary Hearing, but also whether demotion would have been a more appropriate sanction. I do not believe that demotion to a trader on another desk would be an appropriate option, as your trading skills are specific to precious metals. As to whether you could work as a trader on the Desk, the environment on the Desk is one in which management (and others on the Desk) must be able to trust others to exercise their judgment properly and escalate issues appropriately and promptly. Given the nature and seriousness of your errors of judgment, I do not believe that it is possible or appropriate in the circumstances for you to continue to work on the Desk. [D1273][236]Mr Chedin was asked during the hearing if he had considered the claimant’s CV before making his decision on demotion. Mr Chedin was not sure he did. We find on the balance of probabilities that he did not. Mr Chedin accepted, and the tribunal agrees, that it would have been more accurate to say that the claimant’s current skill set was specific to precious metals.[237]Mr Chedin also set out his conclusion that the claimant’s actions amounted to a breach of FCA Code of Conduct rule 2 (although that was a conclusion for RBAS-C to reach, not Mr Chedin). Appeal against dismissal[238]On 20 July 2020 the claimant submitted his first disciplinary appeal submission raising five grounds of appeal and a grievance. The letter contained the third alleged protected disclosure. The respondent accepts that the appeal letter contains the information alleged to have been disclosed; and that it was also a protected act. The basis of the appeal was that:(i) The Bank applied a procedurally unfair process during the disciplinary process;(ii) It was wrong to treat the events in March 2020 as 'serious misconduct' in the specific circumstances of my case;(iii) However, having decided that my conduct amounted to serious misconduct, and specifically not gross misconduct, it was wrong for the Bank to the decide to dismiss me on grounds of SOSR (arising out of the same serious misconduct);(iv) The Bank did not fairly or properly explore the possibility of demotion as an alternative to dismissal, especially in view of the disastrous consequences of a dismissal to my career in financial services. [D1278] 239 the claimant asserted that both Mr McCauley and Mr Botting were aware of what was happening in the market. He requested that his colleagues be interviewed about conversations with Mr Botting between 23 and 25 March the claimant refer to his emails of 24 and 28 March which were related to the moon of April AFP and showed that Mr Botting was following the market himself. Further he had been managing the precious metals business since 2014 and knew the valuation methods. He supported and approved Mr McCauley’s request for an increase in futures exposures from 10,000 to 25,000 lots in mid-2019. The claimant raised a concern of inconsistent treatment based on race.[240]On 29 July 2020 Anita David emailed Eric de Lambilly asking him to conduct the appeal process. We find that Mr de Lambilly was not aware that the views of senior managers, such as Mr Spitz, Mr Gay and Ms Sqalli, that the claimant should have been dismissed.[241]On 21 July 2020 the Claimant submitted a subject access request (“DSAR”). The request was acknowledged on 22 July 2020. Project Medway[242]On 23 July 2020 Philip Cooper informed the Claimant that CACIB’s Compliance Department would conduct an investigation into his alleged protected disclosures (Project Medway). Mr Cooper delegated the investigation of the project to Philip Walker. Mr Cooper became involved again in relation to the drafting of the final report. Eleven people were interviewed and extracts from some of those interviews are set out below.[243]On 27 July 2020 the claimant submitted an Equality Act Questionnaire. This was acknowledged by Donald McLean. It is accepted by the respondent that this is the claimant’s second alleged protected act. The matters raised in the questionnaire were said by the respondent to overlap with the matters raised in the appeal.[244]On the same date, the claimant objected to the proposed three-month period for the DSAR response and requested a response within one month failing which he would lodge a complaint with the ICO.[245]On 29 July 2020 there was an interview between Joseph Ward and Philip Cooper in relation to Project Medway. Mr Ward said: PC How did you manage the risk positions with others on the desk? JW With those at home with or without the WFH kit, they could use the phone, log in on Bloomberg, but really whoever was in the office was doing the job for all of us. Generally operating assumption was you were doing everything if you were in, me and Sam and the other two (Options/Linear split) split the work, you can do it but it was super busy. PC If your covering workload of four with just two of you, how easy was it to manage your positions? JW We had done it before, for block leave, it was like two being on holiday, but the market was busier but we had enough hands to cover it, not to the same level of normal service with only two on the desk but those who were in did all the pricing, trading and managed the risk and those WFH did admin and advice. When I was WFH I would do my emails, admin and check for credit, that's if you had the WFH kit, if you only had a phone you could only really do emails. PC What were the communications like with the office at this time? JW It was dependent on having the kit, I had the kit so I could get chat, Bloomberg, emails and if you didn't have it you could only get emails. With only a phone you only got updates on open chats, so all our hundreds of standing chats were not updated via the phone unless you opened each one.[246]On 3 August 2020 Donald McLean emailed the Claimant to advise that due to the holiday period, CACIB would not be able to provide a response to the Equality Act Questionnaire in the time stipulated by the Claimant.[247]On 5 August 2020, Mr McCauley was interviewed by Mr Cooper as part of Project Medway. He stated: LM: Confirmed that employees couldn't trade from home, so it would be difficult to monitor the positions with 1 person in the office and the other at the BCP, especially the spot, forward and options. Although the desk covers 3 precious metals (Gold, Platinum and Palladium), the market would typically focus on one at a time. Presently (as covered extensively in the press), the market has been trading gold whereas the other two metals have not moved for a while. LM: Confirmed that the office would keep in touch with the employee at the BCP via phone or IM's. Most clients were on Bloomberg but his desk would not normally be client facing (as this would be sales' role) but would be market facing.[248]On 6 August 2020 the respondent requested that the Claimant revise and reduce the search criteria for DSAR given the disproportionately high number of hits generated by the original search criteria and indicated that a response would be provided within three months thereafter. Therefore on 10 August 2020, the claimant provided narrowed search terms for the DSAR requesting a response within a month and repeating his intention to lodge a complaint with the ICO.[249]On 17 August 2020 Mr Walker asked further questions of Mr Ward by email. Mr Ward provided a response on 20 August which included the following: PW• Were the arrangements in place hampering the efforts of staff to conduct their duties - including management of risk, whilst at home? JW• Well, if a trader did not have WFH kit they would not be able to even open the risk positions so I think this is true by definition. Even with WFH kit, without the authorisation to trade I would not be able to hedge the underlying position - I would need to ask someone in the main office to make the trade. So I think that the arrangements certainly hampered any individual traders ability to perform their duties. However, the aim was to always make sure the duties could be performed by SOMEONE at any given time since every team was scheduled to have someone in the office on any given day and therefore authorised to trade.[250]On 18 August 2020 when Mr Mostachfi was interviewed by Philip Walker as part of Project Medway, he stated: [Mr Mostachfi] understood that the bank was being ultra-cautious but in his opinion the set up was not sufficient for risk management - specifically staff risk. The fact remains that the standard practice throughout the banking industry was WFH with trading permitted. Ongoing arrangements for disciplinary appeal process[251]On 20 August 2020, Sivajini Kanesarajah of HR emailed the claimant to arrange an initial meeting with Eric de Lambilly to better understand the Claimant’s grounds of appeal.[252]On 21 August 2020 the claimant informed Sivajini Kanesarajah that he would be on holiday until the end of August and requested that the meeting be scheduled for a date in early September. The initial appeal hearing was scheduled for 9 September.[253]On 25 August 2020 a regular weekly telephone call took place between Nicky Smith and Walid Assaf to discuss HR related matters within the Macro Trading Unit, during which Ms Smith informed Mr Assaf that the Claimant had appealed his dismissal. During the call, Ms Smith told Mr Assaf: Nicky - Alright. Where else are we? So Sam Yang, obviously he has appealed umm... his termination so, that appeal hearing is either happened or is happening imminently. I’m just waiting for Donald to update me as to the date of that and then I’ll let you know. I think, as far as I’m aware, the inclination is that there is going to be no overturning of the original decision, as far as they’re aware. Walid - Ok.[254]Mr de Lambilly told the tribunal that he did not speak to Nicky Smith and was not aware of her views. The views expressed had not come from him. He had only just started to consider the documentation and not begun to form a view at this stage. We accept that evidence.[255]On 1 September 2020 the claimant emailed Sivajini Kanesarajah raising various questions in relation to the initial appeal hearing on 9 September and his Equality Act 2010 questionnaire [D1431].[256]On 4 September 2020 Sivajini Kanesarajah responded to the Claimant’s email of 1 September. The initial appeal hearing was postponed to 18 September.[257]The claimant was interviewed by Phil Walker and Philip Cooper as part of the Project Medway investigation on 3 September 2020.[258]On 10 September 2020 a letter was sent from CACIB’s legal representatives, Allen & Overy, to the claimant, noting that a considerable amount of documentation had been retrieved using the narrowed search terms provided on 10 August, that a review would be conducted as soon as possible, and it was hoped that documents would be provided within the next four weeks. Documents located from the personnel file or retrieved in connection with the disciplinary process were provided.[259]On 16 September 2020 a letter was sent by the Claimant’s legal representatives to CACIB’s legal representatives in relation to the DSAR and the appeal hearing date. A postponement of the initial hearing scheduled for 18 September was sought, pending what the claimant considered to be an incomplete response to his DSAR. A complaint was also raised about an alleged piecemeal approach to the DSAR and to redactions made. The letter also noted that the Claimant would be asking for his appeal hearing to be adjourned for at least a week to enable CACIB to address the points in the letter and provide documents.[260]On 22 September 2020 a reply was sent by CACIB’s legal representatives to the Claimant’s legal representatives about the DSAR, responding to the letter of 16 September and, amongst other things, noting that a DSAR was not intended to be used as a means of acquiring documents for a disciplinary hearing or appeal, or to gain early disclosure of documents that may or may not be relevant to future litigation.[261]The claimant chased for a response to the Equality Act 2010 questionnaire etc on 30 September 2020 by email to Ms Kanesarajah.[262]On 1 October 2020 an email was sent by the claimant to Ms Kanesarajah making various requests for information and documentation. A letter was also sent by the Claimant’s legal representatives to CACIB’s legal representatives in relation to the DSAR, again taking issue with redactions and piecemeal provision of documentation. Additional search parameters for the DSAR were also provided.[263]Ms Kanesarajah emailed the Claimant on 9 October 2020, asking if he would be available to attend an appeal hearing on 19 or 20 October 2020.[264]CACIB’s legal representatives replied to the letter of 1 October on 9 October 2020, confirming that the firm had assisted with the search for, and delivery of, relevant materials responsive to the Claimant’s DSAR and denying any suggestion that the firm or CACIB was attempting to withhold data, or otherwise acting in an underhand manner, to hinder the Claimant’s disciplinary appeal or otherwise. The reply also stated again that a DSAR was not to be used as a means of obtaining documents or for some other collateral purpose; and confirmed that CACIB intended to finalise its response to the Claimant’s DSAR within 7 days.[265]On 13 October 2020, the claimant emailed Ms Kanesarajah expressing a reluctance to proceed with the appeal hearing on 19 or 20 October until further information and documentation had been provided. The claimant again requested a response to his equality act questionnaire.[266]With a letter from CACIB’s legal representatives to the Claimant on 13 October 2020, the DSAR response and a copy of CACIB’s Charter for the Protection of Personal Data were provided.[267]On 16 October 2020, Ms Kanesarajah replied to the Claimant’s email of 13 October, explaining that the proposed appeal hearing with Eric de Lambilly was not a final appeal hearing but an initial meeting for Mr de Lambilly to gain a firm understanding of the Claimant’s grounds of appeal prior to conducting any necessary investigation. Ms Kanesarajah proposed a meeting on 28 October.[268]On 19 October 2020, a letter was sent by the Claimant’s legal representatives to CACIB’s legal representatives identifying documentation that the Claimant considered was missing from the DSAR and repeating the threat to make a report to the ICO.[269]On 20 October 2020 the claimant confirmed to Sivajini Kanesarajah that he was prepared to attend an appeal hearing with Eric de Lambilly on 28 October. An invitation letter was sent to him on 23 October. Initial response to Equality Act 2010 questionnaire[270]Donald McLean emailed the Claimant a response to question 2 of the Equality Act Questionnaire, which had been submitted by the claimant on 27 July, on 20 October 2020. Mr McLean suggested that there was substantial overlap between the EQuA questionnaire questions and the Claimant’s appeal against dismissal and a number of questions would therefore be dealt with during the appeal process. The claimant was told that an answer would be provided to question 12 once the information was to hand [D1478]. During cross examination, Mr McLean accepted that there was no overlap between questions 1, 4, and 11 and the matters to be investigated by Mr de Lambilly. The panel agrees.[271]The answer to question 2 was as follows: 2. Was it a requirement of LM’s Job Description to:- "Ensure that the relevant managers are made fully aware in a timely fashion of all matters that might have a material impact on the desk FX Linear Precious Metal group performance, risk position or compliance with legal or regulatory requirements"? No. LM’s job description included the following requirement (emphasis added): "Ensure that the relevant managers are made fully aware in a timely fashion of all matters that might have a material impact on the FX Options Trading group performance, risk position or compliance with legal or regulatory requirements”.[272]On 21 October 2020, a letter was sent by from CACIB’s legal representatives to the Claimant’s legal representatives in relation to the DSAR request, in response to the letter of 19 October.[273]On 23 October 2020 in an email from Phil Walker to Chris Davies it was said (regarding the draft Project Medway report): Looks good, let's put this all together in a "final" version and circulate to the group making clear it absorbs all discussed comments/amendments etc. for a final review. We just need to give some thought to what we think SY should have, I'm included to carve out the conclusions to the three allegations, remove the lessons learnt (or actions to be taken section) and see if we need to redact/ edit that before sending out, thoughts? [D1904][274]Between 22 October and 4 November 2020 there was further correspondence between the Claimant and HR/Employee Relations in relation to the Equality Act Questionnaire. The claimant expressed dis-satisfaction [D1491] and disagreed that the EQuA questionnaire be dealt with as part of the appeal. He also queried the answer to question 2. In a further response sent on 23 October 2020, one day later, the claimant stated: I understand that the purpose of the questionnaire is to allow employees an opportunity to ask questions, the answers to which will help them decide whether or not to bring a discrimination claim before the Employment Tribunal, Given the delays in the Bank's response, and further, the failure to answer my questions, I am none the wiser than I was in July 2020, and the inevitable conclusion is that rather than being transparent the Bank is trying to shut off this opportunity to me. The questions that I asked were simple and proportionate, and related to historical fact. Essentially, I wanted to know what steps were taken (or not taken) in relation to Louis and Tony, who took them, and why. These are questions which the Bank already knows the answer to. To put off answering this question until the appeal seems to me to be evasive and tactical, and risks me not being provided with the fullness of answers I was seeking. Second disciplinary appeal submission[275]Ms Kanesarajah provided Eric de Lambilly with a file of correspondence and documentation exchanged with the Claimant during September and October on 26 October 2020.[276]The claimant’s submitted his second disciplinary appeal submission, expanding upon his original five grounds of appeal, on 26 October 2020 [D1499]. The document raised the following further matters, amongst others:276.1 that Mr Mostachfi had failed to investigate;276.2 that Mr Chedin was not an independent decision maker, and did not ask about Mr McCauley’s failure to escalate;276.3 that none of the claimant’s suggested witnesses were interviewed;276.4 the suggestion at the RBAC meeting that the claimant was present when WS visited the desk on 25 March was not correct; and that Mr Spitz influenced Mr Chedin through Ms Sqalli.[277]On the last point the claimant stated: I believe that Thomas Spitz may well have influenced the outcome of my case, as can be seen from the RBAC notes of 10th June 2020:- "R Sqalli explained to the Committee that she was fully aligned with L Chedin on his conclusions, and that S Yang should be dismissed." Rita Sqalli is Thomas' COO, and she would not have expressed that view without Thomas' blessing. More than that, I believe that Thomas may have driven the decision, with Laurent (his direct report) simply being his mouthpiece.[278]The claimant accepted in cross examination, and we find, that he was not asking for Ms Sqalli to be interviewed, in making that allegation.[279]At paragraph 63 of the submission, the claimant questioned [D1507]: Was I seen as an easy target because my demeanour is that I am a quiet and hardworking manager who presents himself with modesty and humility (as many Chinese people do), or that my English language skills would not allow me to defend myself as well as others?[280]A letter was sent by the Claimant’s legal representatives to CACIB’s legal representatives on 26 October 2020, asserting that following review of the DSAR response, the Claimant remained concerned that key documents and recordings concerning his data were not provided.[281]On 28 October 2020, the initial appeal hearing took place, chaired by Mr de Lambilly. Ms Kanesarajah was in attendance on behalf of HR.[282]The respondent provided clarification of question 2 of Equality Act questionnaire response on the same date, regarding Mr McCauley’s job description [D1526]. It was asserted that a previous version of the job description had been relied on, in error.[283]On 30 October 2020 a letter was sent by CACIB’s legal representatives in response to the letter of 26 October, explaining that the requested documents were the subject of legal professional privilege.[284]On 1 November 2020 the claimant was sent a copy of the notes of the appeal hearing of 28 October. Submission of Form H to the FCA[285]When completing form H, 2,000 characters are allowed (about 300 words, including spaces). In completing the form, a statement must be signed which includes the following warning: It is a criminal offence, knowingly or recklessly, to give us information that is materially false, misleading or deceptive. Even if you believe information has been provided to us before (whether as part of another notification or otherwise) or is in the public domain, you must nonetheless disclose it clearly and fully in this form and as part of this notification. If there is any doubt about the relevance of information, it should be included.[286]On 2 November 2020 the respondent submitted a Form H (Conduct Rule Breach) to FCA [D1481]. This reflected the content of the disciplinary hearing outcome letter. There was an error in the date of the incident – it should have referred to 24 March, not 14 March. The report states in column L: Failure to escalate/communicate to management(i) the extreme volatility within the market from 14 March 2020;(ii) that there was a real loss/exposure which was not showing in the Desk P&L because of the use of the Mark‐to Model valuation model; and(iii) the potential significant loss of approximately $25‐30 million resulting from the gold futures/swap dislocation during this period. In column M it was reported: ‘Employment terminated for Misconduct’.[287]On 3 November 2020 the claimant returned his amendments and additions to the notes of the appeal hearing of 28 October and requested various documents, including Form H. On 13 November 2020 the claimant was provided with screenshots of Form H.[288]On 4 November 2020 a letter was sent by CACIB’s legal representatives to the Claimant’s legal representatives in relation to documents requested with regards to Rita Sqalli and reiterating that a DSAR was not intended to be used as a means of gaining early disclosure of documents under the disciplinary appeal, or to obtain early disclosure of documents that may or may not be relevant to future litigation.[289]Also on that date, an answer was provided to Q.12 of the EQuA questionnaire:a. the number of dismissals by the Bank in the last three years on grounds of conduct: There were seven dismissals on grounds of conduct between 2017 and 2020.b. the number of dismissals by the Bank in the last three years on grounds of SOSR; In addition to your dismissal, there was one other dismissal on grounds of SOSR between 2017 and 2020 (excluding the expiry of fixed term contracts/internships).c. of the number given at (b), how many dismissals were on grounds of serious but not gross misconduct. The other employee referred to at (b) was dismissed for SOSR following a loss of trust and confidence. Additionally, one of those employees referred to in (a) was dismissed for reasons relating to conduct that did not amount to gross misconduct.[290]The ET1 Claim Form was presented to the Employment Tribunal on 4 November 2020. Interview of Tony Botting by Mr de Lambilly[291]On 5 November 2020, Mr de Lambilly interviewed Tony Botting [D1543 to 1550]. Mr Botting incorrectly asserted on no less than three occasions that the claimant was on the desk when Mr Assaf visited it. TB continued, speaking frankly, that there was no bucket risk, or any concerns raised by Sam. In the last week of March, before March 30, TB saw EFPs had blown out. TB flagged this to Walid. When TB spoke with Sam about this, and Walid spoke with Sam, Sam was clear the position had been rolled, there was no risk, and everything was okay. …. EL summarised that TB was aware that the EFP was blowing up on uphill contracts, there were no flags on Samuel, that June was blowing up also. TB explained Sam did not raise any concerns around this at all. EL asked if Samuel disclosed an EFP position. TB did not believe Sam did. EL explained he had an email March 26 mentioning that the June EFP stays volatile between +12-+22. TB agreed but stated that the risk contained in this email did not mention anything of the outstanding EFP contract or mention any mark to market concerns. TB felt this, especially after he had already spoken to him, and Walid spoke to him, showed ample opportunities not taken… EL asked, when Walid came to the desk and discussed with Louis, whether Louis should have mentioned the EFP breakdown. TB stated Walid was aware of the EFP breakdown just not the significant market loss in the books. On the question of Louis saying something, TB felt Louis did the right thing by raising the concern March 30th, although he could have done it earlier, although he was out of office Thursday and Friday. TB felt Sam was dominant in his thinking around the EFPs, and adamant there was no risk, and that they would close down on $1-2 on each contract. TB relayed that this dominant line of thinking permeated through the desk. TB noted several conversations with Behnouche in May or June where Metals guys were denying an issue with EFP in the first place. [D1548][292]In relation to the alleged stereotyping, the following discussion took place: EL noted Sam alleged his race was a consideration in his dismissal. EL asked if TB felt there was any truth to this statement. TB said no, absolutely not. EL mentioned that as part of Sam’s development plan, there was to be some training. Sam complained he did not receive any management training upon his appointment. EL asked if there was any reason, or if Sam asked for this. TB noted Sam did not ask for training and it was something he suggested after Sam took sole charge of the desk. TB noted this business previously had 2 co-heads. TB relayed that Sam did not mention concerns, it was something TB raised and spoke to HR about. TB reflected that when one was appointed to a senior management position, it was because they were appropriate for the role. TB stated becoming a manager was natural progression if one demonstrated the right ability and set of skills, and training was not something that was routine. [D1550][293]Mr de Lambilly was asked in cross examination whether he considered the possible impact of the statement by Tony Botting about the claimant’s race on Mr Botting’s loss of confidence. He replied that it appeared to him that the loss of confidence came from the failure to escalate, but he accepted that he did not ask the question. Nor did he consider how the comment might have affected Mr Botting’s alleged loss of confidence.[294]Mr de Lambilly also accepted that he did not ask Mr Botting about the difference between mark to market and mark to model, how PnL was to be reported or the practice on the desk. He confirmed that he did not as he did not see how it would be relevant. The matter was escalated (by Mr McCauley) on 30 March 2020. Project Medway Final Report – 11 November 2020[295]In answer to a query from the claimant on 2 September 2020, Mr Cooper emailed the claimant stating: I can confirm that once the whistleblowing investigation has concluded, I will share information from the outcome of my investigation that is relevant to your appeal with both you and the appeal manager. On 11 November 2020, the final version of the Project Medway investigation report was finished. A list of those interviewed is at page 1552 of the full report. Eleven people were interviewed including JW, LMC, BM, John Davighi. Ms Sqalli, Perrick Fennon, Neil Maddocks and Paul Lynn. A summary of the report was provided to the Claimant on 12 November and to Eric de Lambilly on 17 November.[296]We were taken to the interview of Mariano Goldfisher and Bertrand Delauney in which it was stated: Those WFH could still look at trades, their positions etc. but would have to pass on any trading details/requests to those staff members in the office. PW: For those WFH with access to a mobile phone only, what were they allowed/able to do? BD: Not much, they could track critical messages then escalate it back to the staff on the desk in the office but couldn't do much. [D1310][297]John Davighi said in his interview on 19 August 2020, Those WFH on just a mobile would be able to advise and call clients and/or the office but some had little or nothing to do.[298]Perrick Fennon, during his interview on 5 October 2020 said: Team members were very frustrated when WFH without the kit, as they were not able to assist, do their jobs or feel part of the team. They could not assist with the position, PnL or risk management as they could not analyse the required excel spreadsheets on a mobile phone. [D1437][299]Paul Lynn on 6 October 2020, suggested that staff WFH without the HTP kit were ‘only 10% productive’.[300]The draft report had concluded, presumably on the basis of such interviews: Due to the scarcity of IT equipment when WFH, traders would only have access to emails and Bloomberg Chat via their work issued mobile device. This would have severely limited the employee WFH being able to assist with any administrative duties or risk mitigation. [Emphasis added - D1394][301]The final report dated November 2020 concluded: The lack of IT equipment in the early stages of the crisis, clearly reduced the ability of staff WFH to manage risk and assist those team members in the office (who would be covering all the relevant books and executing trades). [Emphasis added - D1557] That finding was not included in the summary provided to Mr De Lambilly.[302]The final report also concluded: However, GMD Senior Management did mitigate this initial lag by reducing non-core trading and taking other options to reduce the workflow on those working from the office and the Risk Management teams WFH.[303]In the penultimate version of the report dated 29 September 2020, allegation 2 was partially upheld. Allegations 1 and 3 were not. In the final version, none of the allegations were upheld. The allegations and findings on them were in any event removed from the summary. As were the lessons learned.[304]On the issue of risk management, paragraph 38 of the report concluded: GMD senior management confirmed that risk management was a priority for the Bank and it would be for senior managers to determine the best method of communication between their respective team members. In order to enforce the Banks' priorities, each desk was split into teams according to their rotation on the GMD rota, one senior member of each sub-team would be in the office. This individual would be the primary contact for queries and have responsibility for reporting and escalating any potential or actual issues, however, it is a general principle in CACIB and the wider banking industry that anyone in the team (both during the Coronavirus pandemic and BAU) would be expected to raise an issue immediately, should it arise. [D1558] Further disciplinary appeal interviews – November 2020 onwards[305]On 12 November 2020, Ms Kanesarajah responded to the Claimant’s email of 3 November. On 13 November Mr de Lambilly interviewed Walid Assaf, Louis McCauley and Joseph Ward.[306]During the interviews with Mr McCauley and Mr Ward, Mr De Lambilly had access to the Bloomberg chats and emails he was referring to. Those he was interviewing did not, and nor were they provided with a copy. The interviews took about nine months after the events being discussed. Mr Ward stated [D1583] JW … felt Tony should have had a much better understanding of the business in general. JW added that Tony’s style of management was not from an interest in precious metals, and JW felt Tony did not seem interested in things, and that Tony could have shown interest before this happened. JW felt the team, Sam included, felt a false sense of security because of the contracts, which may have led to this delay. JW felt as soon as the next week commenced, April 1st or the end of March, and the June EFP opened up and was above normal levels, around 20, trading 22 that day, Sam would have done something. [D1585] …. Regards Sam’s management style, EL asked if JW had any concerns. JW replied yes and no, yes because Sam did not have a lot of options background and they were growing the options business which made it harder for Sam to be Head of the Desk. JW noted that this was not Sam’s fault and they had guys on the desk to look after risk, and JW reflected that it was good Sam felt happy to talk to them about risk. Regards futures, JW felt Sam was very knowledgeable and had a proven track record in growing the franchise with salespeople and staying within risk levels. JW felt Sam waited too long to act which put him in a difficult light. JW noted issues regards managing but nothing to do with product and risk, more to do with compensation. JW noted some shortcomings in Sam’s ability to manage someone’s career but JW felt Sam had an acceptable level of overall expertise regards managing the business. In summary, JW felt Sam’s overall approach was okay in general. [D1586][307]The interview with Mr McCauley contains the following passage: ED referred to an email sent by Joseph on 23rd March stating the single greatest risk is the EFP and that until further notice he felt they needed to use every opportunity they had to fix the delta hedge to reduce the EFP shot. ED asked LM what he understood from the email and what he discussed with Samuel. LM stated that he could almost recall the email from hearing it read out but he was unsure when it was sent and whether Samuel had replied. LM added that if Joseph had presented this then it was a good thing. ED questioned LM on whether he raised a concern following the email. LM suggested that things started to move on 24th March and that his role was how to best manage the risk with the April contract. LM stated that he remembered being busy on 24th March as the options expiration was on 26th March and that he remembered on 24th March there were long pull options that were worth a lot of money. LM explained that his main concern was how to monetise the new value that the EFP moving had created, he recalled telling Tony the EFP moved and that the market had moved a lot so he would need to work hard for the rest of the trading day to ensure he could hold them properly. … ED questioned whether LM had discussed the EFP breakdown risk with Walid. LM confirmed that they spoke about the dislocation that the AP had gone from flat and they discussed it going from close to 0 to a lot higher. LM added that he spoke about the options and that Walid had asked him about the positioning in the options book for the active month. LM explained that he spent a lot of 24th March closing positions and closing a lot of open interest that they had on the book. The options positions were going to be close to flat and the futures position was going to be close to flat. Any small residual would naturally be rolled. LM explained that there were strict rules about coming into the office at this time and he wasn’t sure if his pass would work, which was why he sent the email to Tony to say he would be coming in. LM remarked that he was unsure if Tony had replied but he drove in the next day and asked to see Tony, who asked him to come into the office. LM stated that they spoke for a few minutes where he told him that he hadn’t been in for 2 days, that he thought there was a loss on the options book and wanted to clear it.[308]A letter was sent by the Claimant’s legal representatives to CACIB’s legal representatives in relation to the DSAR on 16 November 2020, requesting further documentation and threatening again to submit a complaint to the ICO.[309]The claimant emailed Sivajini Kanesarajah on the same days with comments in response to her email of 12 November.[310]On 17 November 2020, Mr de Lambilly was provided with the summary outcome of the protected disclosure investigation (Project Medway) as sent to the Claimant. Mr de Lambilly did not ask Mr Cooper for a copy of the full report as he assumed that Mr Cooper’s summary was accurate. Interview of Mr Chedin by Mr de Lambilly[311]On 18 November 2020 Eric de Lambilly concluded an interview with Laurent Chedin. The following is recorded: ED noted the mail sent to SY regarding giving him a second chance with being demoted and given training and asked why he had changed his mind. LC explained that he suggested a demotion and training as it was agreed by Tony, Louis and Joseph that SY is a good trader. LC added that it was also agreed that SY is a poor chief trader and manager, stating that he didn’t feel SY should’ve been appointed as head of training [sic], something he felt was obvious after talking for him an hour. LC stated that he didn’t understand why SY had been appointed as head of trading given that it’s not what he likes to do and prefers to be trading. LC felt that SY couldn’t continue as head of trading due to the significant error of judgement he made, but felt that he could possibly progress as a trader with no management responsibilities. LC confirmed that SY was interested in this when it was mentioned to him, but when he discussed with Tony, Tony thought while it was feasible to demote and retrain SY, given the size of the bank, he couldn’t be deployed to another area given its experience on PM. LC noted that Tony, Behnouche and Walid also stated they could no longer work with SY as they had lost their trust in him… ED noted that SY alleges that LC was influenced by others in his decision. LC confirmed he wasn’t influenced by others and came to the conclusion himself. ED asked LC if he was told the demotion was too lenient. LC stated that he didn’t speak to Thomas about it, and Behnouche and Walid hadn’t said anything. LC added it was only Tony who he asked about demoting SY to a junior trading position and potentially retraining him. ED queried if LC took advice from Tony but made the decision himself. LC explained that, if he was asking for advice, he wouldn’t take it from Tony and wouldn’t take advice from anyone involved in the situation, but given that he was unable to speak to anyone else to preserve confidentiality of the case, the decision was entirely his own…. LC brought up his impression, which might be wrong or right, but impressed that he had not investigated this, was that Louis could have done more to escalate. LC added that Louis could have done more earlier, but this was only an impression. LC said regardless, there was nothing there that could release SY from his duty as Head of Desk to report, as such a duty is permanent and personal, and one can only be discharged of it after clear and unequivocal written delegation to another individual, approved by the Manager. LC stated that whatever they thought of Market risk and MAM’s job of reporting, it could not provide any excuse to a Head of Trading for not reporting an issue to management. LC relayed the view he gave to SY that this excuse might be acceptable for junior staff, but it was completely unacceptable from the Head of Trading that has experience, management responsibility, and a duty to report. LC repeated his view that this was SY trying to deflect the blame from himself. LC explained SY wanted him to see his personal relationship with members of the team and felt LC would get nice words from him from the desk. LC explained the matter was not about nice words, but was about fact-finding, and he did not think he would find additional facts by doing additional interviews. [D1603][312]In relation to the allegation of less favourable treatment, the following exchange took place: ED noted SY’s allegation that he was treated differently to others because of his race and asked LC if there was any truth in this. LC replied that he wasn’t involved in the treatment of Tony or Louis. LC added that he paid attention to the possibility that, given his Chinese culture, SY may have a different style of communication and it may be said that Asian people are less comfortable in reporting issues to management, but he didn’t think SY being of a different race would’ve changed his findings in any way. LC confirmed that SY’s race didn’t influence him in either being more severe or lenient.[313]On 19 November 2020 Ms Kanesarajah responded to the Claimant’s email of 16 November.[314]On 20 November 2020, Mr de Lambilly interviewed Behnouche Mostachfi and conducted a second interview with Tony Botting. Mr Mostachfi was not asked by Mr de Lambilly about the comment at 877 i.e. the N+2 or 3 comment ( see above).[315]The claimant was provided with further comments by way of email in response to Sivajini Kanesarajah’s email of 19 November.[316]On 24 November 2020, Mr de Lambilly interviewed James Donaldson. Mr Donaldson confirmed that he did not have any concerns about the claimant’s abilities as the head of desk.[317]Mr de Lambilly interviewed Phil Lawrence and Lilian Chapman on 25 November. During his interview, Mr Lawrence expressed surprise when the claimant was described as the head of desk, stating that he didn’t think it ever been told he was in charge of the activity. He confirmed that he had never seen any communication that stated that fact. Lilian Chapman confirmed that in their view, when asked who was head of the precious metals desk, Mr Botting was in charge of everything. Further, that they had first discovered the issue on the valuation of the futures on 30 March following a call from Gregoire Mazuel. Ongoing correspondence – DSAR, appeal etc – November/December 2020[318]On 26 November 2020 there was a letter from CACIB’s legal representatives in response to the letter of 16 November and the additional DSAR request made in that, amongst other things requesting that the Claimant provide a list of reasonable search terms and date ranges.[319]On 27 November 2020 Philip Cooper refused to provide any further information about Project Medway.[320]On 30 November 2020 the claimant emailed Sivajini Kanesarajah complaining about the delay in concluding his appeal.[321]On 1 December 2020 Ms Kanesarajah replied to the Claimant’s email of 30 November (and chasing emails of 24 and 27 November), assuring him that the appeal was being taken seriously but it was taking time to work through the volume of document requests made by the Claimant.[322]On 2 December 2020 the claimant emailed Sivajini Kanesarajah with a list of all the document requests he considered were still outstanding. There was email correspondence between the Claimant and Philip Cooper regarding the content of Form H. More search terms and date ranges for the DSAR were provided by the Claimant’s legal representatives.[323]On 8 December 2020 Ms Kanesarajah replied to the Claimant’s email of 2 December (and chasing email of 7 December) responding to the Claimant’s document requests and assuring him that CACIB was doing its best to expedite the appeal process, but it was important for Eric de Lambilly to conduct such interviews/investigations as he considered relevant and necessary.[324]Eric de Lambilly interviewed Thomas Spitz and Gregoire Mazuel on 10 December. Mr Spitz is noted as saying: ED stated that SY alleged that Rita was the mouthpiece driving Laurent's decision at the 10lh June meeting for SY to be dismissed. TS said he did not agree with this statement at all. TS said he gave his view to the committee for SY to be dismissed because his behaviour was not consistent with what's expected from a senior trader and head of desk. TS said he was not invited back to subsequent committees and never spoke to Laurent on how to conduct the investigation. TS added that there was a clear process to handle these situations (RBAC) designed to ensure independent assessment.[325]On 11 December 2020, the claimant emailed Philip Cooper asserting that the content of Form H was incorrect.[326]The claimant emailed Sivajini Kanesarajah on 14 December 2020, expressing concern about what he considered to be the provision of inconsistent and contradictory information by CACIB.[327]On 16 December 2020 Ms Kanesarajah emailed the Claimant confirming that Eric de Lambilly would be on annual leave between 21 December 2020 and 3 January 2021 and asking him to provide a date in early January 2021 for the final appeal hearing to take place.[328]On 17 December 2020 Mr Botting’s employment with the respondent ended on mutually agreed terms, following three month’s garden leave due to a redundancy situation. No one has been hired to replace him.[329]On 18 December 2020 the claimant replied to Sivajini Kanesarajah’s email of 16 December to the effect that he would require sufficient time to read and digest information/documentation prior to a final meeting with Eric de Lambilly, but not identifying the date on which he would be available to meet.[330]On the same date, Philip Cooper replied to the Claimant’s email of 11 December, advising him that no amendment would be made to Form H until after the conclusion of the disciplinary appeal.[331]The ET3 and Grounds of Resistance were presented by CACIB on 24 December 2020.[332]On 30 December 2020 the claimant was provided with the first set of interview notes on the appeal.[333]On 31 December 2020 a letter was sent by CACIB’s legal representatives to the Claimant’s legal representatives in response to the letter of 2 December, noting that additional time was required to respond and a response would be provided by no later than 21 February (being 3 months from the date of the request plus 5 days when the time limit was paused pending receipt of the letter of 2 December). Additional documents were provided as a result of further searches. Ongoing investigations etc – January 2021 onwards[334]On 4 January 2021 the claimant emailed Ms Kanesarajah and Mr de Lambilly requesting further documentation/information.[335]Sivajini Kanesarajah emailed the claimant on 5 January 2021, acknowledging receipt of the claimant’s email of 4 January, noting that she had just returned from annual leave and providing a response to the claimant’s email of 18 December.[336]On 7 January 2021 the claimant emailed Sivajini Kanesarajah requesting further documentation/information. He requested that both Ms Sqalli and Mr Spitz be interviewed. On 29 January 2021 Ms Kanesarajah provided the Claimant with further information/documentation. On 2 February 2021 the claimant emailed Sivajini Kanesarajah requesting further documentation/information. Second interviews with Joseph Ward and Louis McCauley[337]On 9 February 2021 Eric de Lambilly conducted a second interview with Joseph Ward. The following was said: EL stated that on the morning of March 24th, JW had written to Sam at 7.20am, asking what to do in the face of the group facing EFP losses, and asked JW if he recalled sending this message or his concern for group losses. JW explained that, by that date, it had become clear that the mark to market losses were serious, and thus he had asked Sam, as head of the desk and his superior, what to do. JW noted that he had asked Sam more than once. EL asked JW to explain what had happened next. JW stated that not much had happened on the day in terms of action, but that he did not have the chat in front of him, so could not be certain. EL stated that Sam had written in the chat that he would call JW. JW agreed that they must then have talked. JW explained that Sam believed that the situation would be short-lived, and that the impact was on the April contract, in which the group did not have a big position. JW noted that on the other chat, they had seen that it was flat, and noted that the options book got out of its remaining April futures position through the option expiry. JW noted that the majority of the group’s position remained in the June futures, and that Sam thought that the squeeze in the position would apply to April only, and that it was too early to know what would happen in June…. JW went on to state that he had asked Sam on 2 occasions between March 24th and March 27th about what should be done JW explained that Sam had wanted to wait to see how the market would trade on the June contract, and that Sam’s goal had been to use every available opportunity to reduce the risk and use the franchise to reduce their positions. EL confirmed that, when JW had asked Sam what to do, the instruction had been to wait and see if the market came back. [D1762-7] The tribunal notes that Mr Ward’s recollection of this call as noted above is different to the claimant’s.[338]On 10 February 2021, Mr de Lambilly conducted a second interview with Louis McCauley. 1768-1771. During the interview Mr McCauley told Mr de Lambilly: LM stated that he had had many conversations with Walid and Behnouche, such as on the Friday after Monday 30th. On this date, LM reported that they had had a meeting in which Walid and Behnouche had asked him to manage the closure of the EFP as the bank had needed a smaller risk appetite as too much money had been lost. LM stated that Walid and Behnouche had expressed that they trusted him, as he had shown integrity by having told Tony about the money lost in the options, and was a whistleblower. LM stated that they had said that, on the other hand, Sam had not been honest and that they valued honesty in a trader. LM explained that Tony had not been involved in these conversations, rather he had just asked LM about which trades had been done. LM stated that the majority of conversations he had had with Walid and Behnouche were with the pair of them together, although he had had a couple of conversations with just Behnouche. The tribunal notes that there was never any finding of dishonesty made against the claimant and nor in the tribunal’s judgment would there have been any reasonable basis for such a finding to have been made. Ongoing disclosure/DSAR requests[339]On 17 February 2021 Rhea Kushin provided the Claimant with further DSAR information/documentation. A Response to additional DSAR requests was provided on 18 February 2021.[340]On 25 February 2021 the claimant sent two emails to Sivajini Kanesarajah requesting further information/documentation. A response was provided on 2 March 2021 in two emails.[341]The claimant emailed Sivajini Kanesarajah on 3 March 2021, noting that there remained some outstanding requests for information/documentation and noting that he would require time to review the information/documentation and then prepare his submission for the final appeal hearing before attending that hearing. A response was provided on 9 March 2021.[342]On 26 March 2021 the third tranche of disclosure was provided by the respondent. The respondent disclosed documents created or located since 19 February and proposed that documents created or located after 26 March be provided on 16 April. Third appeal submission – 8 April 2021[343]On 8 April 2021 the claimant submitted a third appeal submission expanding further upon the original 5 grounds of appeal and raising 4 new grounds of appeal. The respondent accepts that this document disclosed information which is relied on by the claimant in relation to the first, second, fourth and fifth alleged protected disclosures [D1821]. The further submission followed the receipt by the claimant of thousands of pages of documents from the DSAR and disclosure in the Employment Tribunal case. Amongst other things, the claimant asserted that there had been a systems and control failure regarding mark to model: I believe that the evidence provided by the Bank shows beyond doubt that the Bank had breached the FCA’s systems and controls requirements by using a risk valuation model which was not fit for purpose. It had been alerted to the risks of the existing system, and failed to take any action to remedy it for financial reasons.[344]The claimant also mentioned the Covid situation, the EFP reduction plan, and alleged untruths around key facts, all derived from documents he had received after his previous two appeal submissions.[345]The final appeal hearing took place on 13 April 2021 between Eric de Lambilly and the claimant. William Le Prado attended on behalf of HR. Notes of the hearing were sent to the claimant on 20 April [D1840 to 1856]. The claimant was told at the end of the meeting that: ‘EL would need to interview further people following this meeting and it was too early to give further information’. As it turned out, no further interviews took place after this interview with the claimant on 13 April.[346]On 22 April 2021, the claimant returned his amendments/additions to the notes of the final appeal hearing of 13 April and also provided further documents, questions and comments to be considered by Mr de Lambilly.[347]Sivajini Kanesarajah confirmed to the Claimant on 23 April 2021, that Eric de Lambilly would consider the information/documentation provided by the Claimant the day before. On 28 April 2021 Ms Kanesarajah emailed the Claimant to inform him that Eric de Lambilly anticipated that he would be in a position to provide a response to the Claimant during the week commencing 10 May 2021.[348]The claimant submitted a fourth appeal submission on 10 May 2021, requesting that it be considered for both his appeal and his grievance [D1860]. Disciplinary appeal outcome[349]On 13 May 2021 Mr de Lambilly’s appeal outcome letter was sent to the claimant. The disciplinary appeal and grievance were not upheld [D1865 to 1882]. The decision letter confirmed that Mr de Lambilly interviewed eleven witnesses in total, as part of the appeal process. The following conclusions were reached by Mr de Lambilly. Benouche Mostachfi’s investigation[350]Mr de Lambilly accepted that Mr Mostachfi was not independent and the original investigation was insufficient. He concluded however that had someone more independent been appointed to investigate, that a recommendation would still have been made to convene a disciplinary hearing. Alleged influence on Mr Chedin[351]Regarding Mr Chedin being influenced by others, Mr de Lambilly concluded: I have seen no evidence to suggest or demonstrate that the decision to terminate was not his own, and I found Laurent’s responses at his interview to be credible when I put it to him that his decision had been influenced. Notably, he said to me that: “if he was asking for advice, he wouldn’t take it from Tony and wouldn't take advice from anyone involved in the situation, but given that he was unable to speak to anyone else to preserve confidentiality of the case, the decision was entirely his own” which I found to be convincing and genuine.[352]Mr de Lambilly accepted before the tribunal that it was not correct that he was not able to speak to others to preserve confidentiality; and the fact that that Mr Chedin spoke to Ms Sqalli should have been mentioned. Had it been, questions would have been asked of Mr Chedin about that call, and potentially an interview would have taken place with Ms Sqalli. Failure to interview other witnesses[353]Regarding the failure of Mr Chedin to interview witnesses suggested by the claimant in his disciplinary hearing submission, Mr de Lambilly concluded: I agree with you that Laurent, as part of the disciplinary process, should have asked Louis about the liming of his escalation and should not have focused on questions relating to your management style. He should have also conducted the interviews as you had requested with Phil Lawrence, Lilian Chaplain, James Donaldson and Joseph Ward. I have sought to address both of these deficiencies in the original disciplinary process with my fulsome investigation and broad lines of inquiry. Walid Assaf’s visit to the desk[354]Mr De Lambilly concluded in relation to the suggestion that Mr Chedin’s presentation to the RBAC meeting was incorrect because he stated that the claimant was present when Mr Assaf visited, that these factual inaccuracies were not fundamental or troubling and did not prejudice his final decision. Mr de Lambilly stated in cross examination that this was because the claimant failed to escalate the EFP issue on three occasions, namely in the email to Mr Botting of 24 March, and when he was back in the office on 26 and 27 March. The fourth allegation[355]As for the fourth allegation, Mr De Lambilly concluded that the fact that this did not materially affect Mr Chedin’s decision, since it was: quite clearly an amalgamation of the three allegations that were put to you at disciplinary and on which Lauren made his findings. Covid-19 working arrangements[356]In relation to Covid 19 arrangements Mr de Lambilly concluded that whilst the pandemic caused serious disruption to normal working practices, that did not excuse the claimant’s failure to escalate. He was able to respond to Mr Botting’s email of 24 March whilst working from home and could have escalated the EFP dislocation by email, text, a phone call or in person when he was in the office on 26 and 27 March 2020 [D1871-2]. Risk escalation[357]The following passages were quoted from the interview with Joseph Ward on 9 February 2021: JW explained that, by that dale, it had become clear that the mark to market losses were serious, and thus he had asked Sam, as head of the desk and his superior, what to do. JW noted that he had asked Sam more than once. o “JW explained that Sam believed that the situation would be short-lived, and that the impact was on the April contract, in which the group did not have a big position. JW noted that on the other chat, they had seen that it was flat, and noted that the options book got out of its remaining April futures position through the option expiry. “ o "JW noted that the majority of the group's position remained in the June futures, and that Sam thought that the squeeze in the position would apply to April only, and that it was too early to know what would happen in June. JW explained that, due to the efforts by the LBMA and CME to fix the discrepancy, Sam did not think it an appropriate time to escalate the situation." o “JW went on to state that he had asked Sam on 2 occasions between March 24th and March 27th about what should be done. JW explained that Sam had wanted to wait to see how the market would trade on the June contract, and that Sam ’s goal had been to use every available opportunity to reduce the risk and use the franchise to reduce their positions ” o “JW slated that, if plus 80 were used as a high point, the P&L would be at approximately minus $100 million. JW stated that he did not think this was a fair figure to use. JW expressed his doubt that June was trading at a rate like plus 80, but noted that, if they had even been plus 30, it would still have been a serious loss of $45 million, an enormous sum for their desk. " o “JW responded that, though he could not speculate, there was no doubt that Sam knew the potential size of the losses. " o "JW explained his belief that Sam had felt positive and relieved about how little April exposure the team had, due to the contract going on to trade up to plus 80. JW expressed his belief that Sam regretted that he did not escalate to management faster.” o "JW explained that Sam had never explicitly said why he wouldn't raise the alarm but based on JW's own speculation and experience in Sam’s appeal meetings, JW stated his belief that Sam had felt the market was in the process of correcting, would have raised the alarm in time, and regretted not having done so. JW stated that during that week, it did not seem that Sam had planned to escalate, though JW had asked him more than once ” Differential treatment/race discrimination[358]In relation to alleged differential treatment/race discrimination Mr de Lambilly concluded the following. In relation to Tony Botting, Mr de Lambilly concluded: When the scale of the unrealised mark-to-market losses on your desk were raised to Tony on 30 March 2020, he immediately raised this to senior management (as you should have done following your interaction with Joseph on 23 and 24 March 2020). He realised that the Bank was significantly exposed to the dislocation in the gold futures market and that this needed immediate escalation and rectification, even if it meant realising an actual loss. You did not share this view. Tony did not, based on the facts and information available to me, breach any of the stipulations of his job description. These are the key points of distinction between why your conduct resulted in a disciplinary hearing, and his did not. Tony’s comment on 14 May 2020 regarding Asian people is regrettable and wrong. If he were still with the Bank I would be recommending that he attend appropriate training and coaching to ensure that that this concern was addressed appropriately.[359]In relation to Mr McCauley it was concluded: Although Louis was the most senior person in the office when Team B was working from the office, this did not equip him with greater powers or responsibilities and nor did it change his existing obligations which, in terms of reporting, was to escalate concerns to you. There had been no formal or informal delegation of duty from you and, therefore, by escalating matters to you as Head of Desk, I consider Louis acted in accordance with his obligations. In other words, Louis’s presence in the office and you working remotely did not stop you from being the Head of Desk and having the obligation to escalate matters in line with your own reporting obligations. … Louis did escalate his concerns to you on email on 29 March 2020 stating “...the bank is over representing the PnL of the metals desk by a significant amount” and that there were “very real actual Mark-to-Market implications based on where the COM EX gold futures arc trading”. Whilst I acknowledge that this was sent at 9.21pm on a Sunday night, you advised me that the reason you had not replied, or forwarded this escalation email to Tony or senior management was because you had not checked your emails that night, or that morning, as you drove to work rather than taking the train (when you would normally review emails sent overnight). I note, however, that you were logged in to Bloomberg Chat at 5:25am and at 6:50am on 30 March 2020, and active on your work email account at 7:32am that same morning emailing William Benguerel. Furthermore, you were in the office with Tony an hour before Louis arrived on 30 March 2020, so you had the opportunity to raise the critical issue of unrealized material loss in the perimeter under your direct responsibility with Tony first before Louis arrived. Louis then raised his concerns with Tony on 30 March 2020 when you had failed to do so, and was therefore seen by many in the Bank as a whistleblower, entitling him to protection from victimisation and retaliation. [D1877] The Bank’s Risk Valuation Model[360]As to the inadequacy of the Bank’s Risk Valuation Model. Mr de Lambilly concluded: I have considered whether your points regarding the "inadequacy of the Bank’s Risk valuation model” namely its use of the mark-to-model risk valuation model rather than the mark-to-market valuation model - justify or explain why you did not escalate matters. As I established during my investigation, even if the Bank's systems were not showing the unrealised loss, you were aware, on 23 March 2021 and thereafter, that the desk PnL would have shown tens of millions of losses, when calculated on a markto-market basis. You asked, in your appeal submissions: "The purpose of MAM (Market Advisory Monitoring) and DRM (Market Risk Department) is to form the Second Line of Defence (within a Three forms of Defence model of risk management). In the event that the First Line of Defence (Trading) does not identify risk, then the Second Line should. Why therefore is MAM or DRM not under the same scrutiny as me?” This is, in my view, a further attempt by you to deflect away from your own failure to escalate, given that you had irrefutably identified a risk, and had been asked what to do about such risk by Joseph on multiple occasions. You have failed to appreciate that as a first line of defence, you have a responsibility to make sure that the valuation policy of the bank is as accurate as possible and this is the reason why you have the duty to escalate any material issue that could lead to an adjustment of the valuation. Naturally, and in accordance with good governance and franchise-risk management, the Bank is going to take steps to ensure that a similar issue cannot arise again. The fact it is doing so does not exculpate you. Rather, it shows the severity of your misconduct.[361]Mr de Lambilly noted that in his written disciplinary submission, the claimant states: "It should also be noted that during the week, multiple PnL reports were generated, but at no stage was there any discrepancy between the PnL computed by MAM, and the PnL estimated by the team ... There was no major failure in daily Contango curve checking by MAM Murex" In your investigation meeting minutes dated 15 April 2020, you state: "Back to 2015-16, we proposed to switch the method to base on CME settlement prices, that would allow better daily PnL calculation if we looked to sell EFP at 0.40, and looked to buy back at -I. In normal markets, -1/+1 always the range for EFP on expiry. Our proposal was turned down, because Murex has difficulties. ” As Behnouche summarised, "you asked to change method because you knew' there was a valuation problem in MUREX.” I therefore do not find your points regarding the Bank’s valuation system to be a credible ground of appeal. [D1879] Some other substantial reason, demotion as alternative, unfair sanction[362]Mr De Lambilly did not specifically consider the question of demotion as such or what the claimant’s skill set was. During the interview with Mr Chedin, Mr De Lambilly did not ask him about the claimant’s skill set. He concluded that his actions warranted summary dismissal in any event: One of the most troubling aspects of your case is that you have refused to acknowledge that you failed to escalate at the correct time, maintaining that you had nothing of concern to raise to management prior to 30 March 2020. This stance makes your position or employment as a trader at the Bank (even without management responsibilities) untenable. [D1879][363]Mr de Lambilly accepted that he did not investigate the allegations raised in protected disclosure 5, namely, allegations of dishonesty by Mr Mostachfi, Mr Assaf and others by continuing to state that the claimant was on the desk when Mr Assaf visited on 25 March 2020. Mr de Lambilly held that any confusion around that visit was corrected by Mr Chedin in the disciplinary hearing outcome letter.[364]Mr de Lambilly’s overall conclusion [D1865] was summarised as follows: My overall finding can be summarised as follows: you knew' that the Bank had exposure to significant losses on the Precious Metals desk, for which you had overall responsibility, and you failed to escalate it to senior management in accordance with your contractual obligations and duties. I have considered each of the grounds that you have raised in support of your appeal but ultimately I find that your failure to escalate, even during the unprecedented times in which this episode arose, is grounds for summary dismissal. Your race and/or any alleged protected disclosures that you made played no part in Laurent’s decision, or mine. Response to Equality Act Questionnaire[365]On 20 May 2021 the remaining response to the Claimant’s Equality Act Questionnaire was provided to the Claimant.[366]In relation to question 5 - Was any consideration given by the Bank to whether LM’s non-escalation of risk to(a) me (b) Tony Batting and/or (c) Walid Assaf amounted to misconduct?, the answer was as follows. Having confirmed that Mr McCauley had not been the subject of a disciplinary investigation; because “The Bank considered that LM's actions - having escalated the issue to management first - did not warrant formal investigation in the circumstances”. Mr de Lambilly accepted during the hearing that he did not in fact know whether any formal decision was made; if so, by whom; or for what reason(s).[367]In answer to question 6. “If so, please identify all of those involved in any discussion relating to LM 's conduct and whether it amounted to misconduct”. the answer given was: There was not, insofar as i am aware, a formal meeting or hearing in which allegations of misconduct were discussed, for the reason set out in 5) above. Based on the evidence I have seen in preparing the appeal outcome, I have seen that LM’s actions were discussed by WA, TB. BM. Thomas Spitz, Carlos Molinas, none of whom concluded that any disciplinary action was warranted in the circumstances.[368]Mr de Lambilly accepted during the hearing that he did not ask WA, TB or BM or TS or CM whether they considered the possibility of an investigation before answering.[369]As for question 8, the reply confirmed: Q8 Was any consideration given by the Bank to Tony Botting's handling of any risk arising from the Gold EFP breakdown, and whether his actions amounted to misconduct or management failing, having particular regard to the fact that both he and LM were together in the office from 23-25th March 2020? The Bank did not consider that TB's actions warranted formal investigation in the circumstances.[370]Mr de Lambilly confirmed that he did not specifically interview Mr Botting’s managers to check whether a decision was made and if so why. He did go on however to distinguish why in his view Mr Botting’s actions did not result in disciplinary action whereas the claimant’s did – see above [D1888]. Grievance appeal[371]On 27 May 2021 the claimant submitted a grievance appeal. That was conducted by Francois Rancine. Since none of the issues before us require any fact findings in relation to that appeal, nothing more need be said save that the grievance appeal was rejected by Mr Rancine on 10 September 2021. Further representations regarding Form H[372]On 28 May 2021 the claimant emailed Philip Cooper alleging that Form H was incorrect. A reply was sent on 10 June 2021 [D1907-8].[373]On 5 July 2021, Philip Cooper updated Form H and sent it to the FCA. The changes made are reflected below: "New notification Updating a previous notification Failure to escalate/communicate to line management:(i) any concerns regarding the position held by the individual and his team in gold futures following the EFP breakdown the extreme volatiity within the market from 14 March 2020;(ii) that there was a real loss/exposure which was not showing in the Desk P&L because of the use of the Mark-to-Model valuation model; and (ii i) the potential significant negative impact to the Precious Metals NBI loss of approximately US$25-30 million as at 30 March 2020, if the position was marked to the futures market and/or closed resulting from the gold futures/swap dislocation during this period. Mr Yang has disputed the Bank's findings and submitted an appeal in writing. The appeal is underway and the FCA will be informed about the final determination of that appeal in due course.[374]On 20 July 2021 the claimant emailed Philip Cooper objecting to the revised Form H that had been provided to the FCA. The email disclosed information which the claimant relies on as his sixth alleged protected disclosure [D1951]. The claimant asserted that SUP 15.6.4 states: If a firm becomes aware, or has information that reasonably suggests that it has or may have provided the FCA with information which was or may have been false, misleading, incomplete or inaccurate, or has or may have changed in a material particular, it must notify the FCA immediately. Subject to SUP 15.6.5R, the notification must include:(1) details of the information which is or may be false, misleading, incomplete or inaccurate, or has or may have changed;(2) an explanation why such information was or may have been provided; and(3) the correct information[375]On 21 July 2021, Philip Cooper emailed the Claimant to advise that all further correspondence in relation to Form H should be dealt with by the respondent’s legal advisers. The claimant emailed Philip Cooper on 28 July, objecting to Philip Cooper’s email of 21 July. On 29 July, Philip Cooper emailed the Claimant reiterating that any further correspondence in relation to Form H should be conducted by the legal advisers. In line with that, on 3 August 2021, a letter was sent by CACIB’s legal representatives to the Claimant’s legal representatives requesting that any further correspondence regarding Form H and/or CACIB’s correspondence with the FCA in relation to the Claimant’s dismissal or Conduct Rule breach to be directed to them. The letter also confirmed that CACIB did not consider that any further amendments to Form H were required and CACIB was satisfied that it had complied with its regulatory obligations. The letter concluded: As your client is aware (having been provided with a copy of Mr Cooper’s correspondence with the FCA) our client has requested that the FCA update the content of Form H. Whilst it is clear that our clients disagree on this topic, our client does not consider any further amendments to Form H are required and is satisfied that it has complied with its regulatory obligations.[376]On 6 August 2021 a letter was sent by the Claimant’s legal representatives to CACIB’s legal representatives in relation to Form H, seeking responses to a number of questions and noting that in the absence of a response the Claimant would be left with no choice other than to take up the shortcomings in the Form H directly with the FCA.[377]A letter was sent by CACIB’s legal representatives to the Claimant’s legal representatives on 19 August 2021, in response to the letter of 6 August in relation to Form H and explaining why no further changes/additions to Form H were required. The letter concluded: Our client is aware that the FCA is authorised to make enquiries of them and to seek further information if it thinks appropriate in order to verify information that our client has provided in Form H, including requiring our client to provide further documents at any time. Our client will of course cooperate fully with the FCA should such enquiry be made. In addition, your client is of course free to provide such other information to the FCA as he considers appropriate.[378]On 26 November 2021 the claimant’s legal representatives wrote to the FCA regarding Form H [D2050-2054]. It was asserted on the claimant’s behalf that the notification should have included relevant information about Covid 19 arrangements and project Medway, the valuation method, and Mr McCauley’s failure to escalate.[379]On 17 December 2021 Philip Cooper emailed the FCA regarding Form H stating: I do not propose to respond to each of the assertions or representations made in that letter, save to say that we have been in protracted negotiations with Mr Yang regarding the Conduct Rule Breach and the contents of Form H. A number of the points that Mr Yang seeks to include in the Form H submission as detailed in the letter are provided out of context, potentially misleading, and/or are the subject of the Employment Tribunal proceedings. I am confident that the Bank and I have fully complied with our regulatory obligations with respect to notification to the FCA in the annual Form H submission of the Conduct Rule Breach in respect of this matter.[380]On 20 December 2021 the FCA emailed Philip Cooper seeking a summary of the bank’s position on the issues relating to Form H. Mr Cooper accepted during the hearing that this was the first time he had communicated with the FCA about mark to model as used on the PM Desk. He further accepted that this was the first communication with the FCA in relation to Covid 19/Project Medway. He had expected the FCA to request an audit as to how the bank responded to see whether it was robust. There had been no request before then.[381]On 17 February 2022 Mr Cooper submitted a response to the FCA on Form H.
Legal principles
[382]The tribunal was referred to a large number of legal authorities. The relevant legal principles are set out at length in Ms Davis’ Opening Submissions on behalf of the respondent and further authorities are referred to in Ms Davis’ closing submissions. Those principles are largely agreed, save that Ms D’Souza referred us to further legal authorities in her Closing Submissions on behalf of the claimant. Both counsel subsequently agreed to provide their submissions as Word documents. Since the legal principles are largely agreed, they are reproduced in Annex B. The tribunal is grateful to both counsel for their detailed exposition of the law and their co-operation in that regard.[383]In deciding the issues before us, the tribunal confirms that the legal principles set out in Annex B, as expanded on by both counsel in oral submissions at the conclusion of the hearing have been carefully considered and applied.
Conclusions
[384]Bearing in mind the facts found above and the relevant legal principles, our conclusions on the issues before us are as follows. (a) Protected disclosures Issue 1 - Disclosure 1 – disciplinary submission 4 May 2020 and appeal submission 8 April 2021 – did those submissions contain the information set out below? That when on ‘Be At Home’ status, the Claimant and others did not have access to market trading or internal systems, but only a mobile phone and Bloomberg chat; Neither the Claimant nor his team had been given any specific guidelines as to what to do when risk materialised when not in the office, or any special arrangement for information sharing.[385]We conclude that the disciplinary submission of 4 May 2020 clearly disclosed the information set out above – see our findings of fact above and D1136. It is admitted that the 8 April 2021 submission disclosed that information. Issue 2 - Disclosure 2 – disciplinary submission 4 May 2020 and appeal submission 8 April 2021 – did those submissions contain the information set out below? That the Respondent had chosen to measure risk associated with futures positions using the OTC contango curve (i.e. Mark to Model methodology), and not EFP (“Exchange for Physical”) levels (i.e. the Mark to Market model); That the Respondent had actively chosen not to measure risk using the Marked to Market model in 2015/2016 for technical reasons; That had the risk been clearly quantifiable, the Respondent’s Risk Management function (also known as the Second Line of Defence) should have detected the risk (which they did not).[386]Again, we conclude that the disciplinary submission of 4 May 2020 disclosed the information set out above – see our findings of fact above and D1141 and 1142. It is admitted that the 8 April 20201 submission disclosed that information. Issue 3 - Disclosure 3 – appeal submission 20 July 2020[387]It is admitted, and we accept, that the document contained the disclosures of information set out below: That those on ‘Be At Home’ status had no access to the Respondent’s trading and market information systems. Accordingly, when on ‘Be At Home’ status, employees were not working from home in a manner deemed acceptable by the FCA, in line with its guidance dated 4th March 2020; That team rotation arrangements in place during the week commencing 23rd March 2020 meant that the team in the office had custody of the desk book, and attendant risk reporting obligations and any failure by the Respondent to have communicated such obligations to the team in the office, would of itself amount to a systems and controls failing; That the Respondent had failed to provide any guidance as to communication and risk reporting in light of the changed working arrangement described above; That the Claimant understood there to have been a number of complaints from other traders on other desks about the inadequacy of equipment when working from home; That such failings added up to a systems and controls failure on the part of the Respondent; That the Claimant considered that he had been treated as a scapegoat by the Bank, and that the Bank was sidestepping by the Claimant’s dismissal any proper examination of the adequacy of its Covid-19 working arrangements in order to avoid regulatory scrutiny; That the Claimant had made a protected disclosure in his written disciplinary submission, which had gone uninvestigated in order to reduce regulatory and reputational risks to the Respondent. Issue 4 - Disclosure 4 - Appeal submission 8 April 2021[388]It is admitted and the tribunal accepts that the document contained the disclosure of information set out below: That Mr Cooper’s summary outcome letter on Project Medway had glossed over highly pertinent evidence relevant to the Claimant’s appeal, namely evidence that showed that those working from home without an HTP kit were disadvantaged in relation to seeing position and P&L, and risk management. Issue 5 - Disclosure 5 - Appeal submission 8 April 2021[389]It is admitted and the tribunal accepts that the document contained the disclosure of information set out below: That various senior managers of the Respondent (namely Mr Behnouche Mostachfi, Mr Walid Assaf, Mr Thomas Spitz and Mr Laurent Chedin) had advanced or perpetuated untruths around key facts relating to the Claimant’s conduct (namely that he had been on the desk when Mr Walid Assaf visited the desk) and were thereby to be regarded as dishonest or negligent, contrary to Individual Conduct Rule 1 (Integrity). Issue 6 - Disclosure 6 – letter to Mr Cooper of 20 July 2021[390]It is admitted and the tribunal accepts that the document contained the disclosures of information set out below: The Respondent had, in breach of FCA rules,(a) failed to disclose to the FCA why inaccurate information had been originally supplied to it,(b) had failed to provide ‘complete’ information to the FCA about the gold volatility episode, and(c) the reason for the Respondent’s failure to provide ‘complete’ information about the gold volatility episode, was that the Respondent wished to avoid providing information to the regulator which showed a systems and control failure by the Respondent. Issue 7 – were the disclosures of information made?[391]Yes – see above. Issue 12 – were the disclosures made to the claimant’s employer in accordance with S.43C ERA?[392]Yes. All the documents were sent to individuals working for the Bank, in their capacity as employees/officers of the bank. Issues 8, 9 10, 11 and 13[393]Having found that the documents referred to above contained the disclosures of information set out, and it being clear to the tribunal that the disclosures of information were made to the claimant’s employer (see issue 12 below), the tribunal considered whether it was proportionate and necessary to consider the issues related to section 43B Employment Rights Act 1996; and/or the issue of reasonable belief that the disclosures of information were made in the public interest.[394]The tribunal decided that this would not be proportionate and necessary, if the tribunal were able to arrive at clear conclusions as to whether or not any of the disclosures of information made, regardless of whether or not they were protected disclosures, had the required causative influence on the detriments alleged and/or the dismissal – ‘the causation questions’. That is, in the case of the alleged detriments, that they were done on the ground that the employee had made the protected disclosures; and, in relation to the dismissal, that the relevant protected disclosures were the reason/principal reason for the dismissal. Having considered the causation questions, the tribunal concluded, for the reasons set out below, that there is no causal link between the disclosures of information and the alleged detriments/dismissal. In those circumstances, the tribunal did not consider it proportionate or necessary to reach any firm conclusions in relation to issues 8, 9, 10, 11 and 13 since, regardless of our conclusions in relation to those issues, the protected disclosure detriment/dismissal claims would still have been bound to fail. (b) Detriment[395]The claimant alleges that the following alleged detriments were done on the ground that the claimant made the disclosures of information which in turn amounted to protected disclosures. For short-hand, protected disclosure 1 will be referred to below as PD1 etc. Issue 14a. The disciplinary officer (Laurent Chedin) glossing over whether the Respondent had, in the circumstances, failed to implement adequate systems or controls;[396]The Tribunal concludes that this was potentially a detriment. The tribunal further concludes that Mr Chedin did not seriously consider whether the respondent had, in the circumstances, failed to implement adequate systems or controls because he approached the disciplinary allegations with a narrow focus. The tribunal further concludes that he did so because to him the issue before him was simple, namely, why had the claimant not escalated the potential loss caused by the EFP dislocation? There was therefore no causal connection between the narrow focus and alleged PDs 1 and 2. Issue 14b. The disciplinary hearing officer (Laurent Chedin) failing to consider meaningfully whether and to what extent any systems and controls failures had contributed to the Claimant’s conduct as alleged[397]Again, the Tribunal concludes that this was potentially a detriment. The tribunal further concludes that Mr Chedin took the view that regardless of the valuation method used, the claimant should have been aware of the effect of the EFP dislocation on PnL and he should have escalated that issue. He would have reached that view, regardless of whether the claimant raised PD1 and/or PD2. Whether that was reasonable is considered below in relation to the unfair dismissal claim. There was, however, no causal connection between the claimant raising PD1 and/or PD2 and the view taken by Mr Chedin as to whether alleged systems and control failures had contributed to the claimant’s conduct as alleged. Issue 14c. The disciplinary officer (Laurent Chedin) failing to conduct any proper investigation following receipt of the Claimant’s disclosures, particularly: i. Failing to consider, as directed by the RBAC on 1st April 2020, whether Louis McCauley had culpably failed to escalate risk and/or by failing to ask Mr. McCauley any questions about his conduct; ii. Failing to interview any witness suggested by the Claimant, including anyone from Risk Management who could have explained the Respondent’s risk models.[398]Again, the Tribunal concludes that these were potentially detrimental to the claimant. The tribunal concludes however that there was no causal connection between the matters alleged above and PDs 1 and 2. Mr Chedin did not consider whether Mr McCauley had culpably failed to escalate risk; and nor did he fail to ask any questions about his conduct; because in both cases, his focus was on the disciplinary allegations against the claimant. Mr Chedin was not asked/directed, either by RBAC or anyone else, to investigate any culpable conduct by Mr McCauley.[399]As for the failure to interview the witnesses suggested by the claimant, including anyone from risk management, that again arose from Mr Chedin’s narrow focus and approach to the disciplinary allegations, as discussed above, and had nothing to do with alleged PDs 1 and 2. The tribunal concludes that there is no causal connection between these alleged failings in the disciplinary process and the protected disclosures made. Mr Chedin did not think the witnesses would help him to decide on the disciplinary allegations. As he told Mr de Lambilly in his interview with him on 18 November 2020, Mr Chedin felt that the claimant was just hoping to get ‘nice words’ out of his team. We will return to these matters in relation to the unfair dismissal claim issues. Our conclusions in relation to those issues do not impact on our conclusions in relation to the protected disclosure detriment claims. Issue 14d. Philip Cooper failing to consider the full and precise circumstances of the case (including systems and controls failures) before advising the RBAC that the Claimant had breached FCA Conduct Rule 2;[400]In relation to this particular allegation, the Tribunal concludes that this could potentially amount to a detriment. The Tribunal concludes however that there was no causal connection between the protected disclosures made by the claimant and the approach taken by Mr Cooper at the RBAC meeting. The approach taken by RBAC, where disciplinary allegations have been upheld following a disciplinary investigation and hearing, is to consider whether, in the light of the disciplinary findings made, there has also been a breach of the FCA Conduct Rules.[401]That general approach is what happened in this case. The RBAS-C followed the RBAC at which Mr Chedin had presented his disciplinary findings. Mr Chedin’s report had been circulated before the meeting. The tribunal is satisfied that the approach by RBAS-C had nothing to do with the claimant’s protected disclosures. To the contrary, it simply followed the same approach it would have adopted in relation to any employee against whom disciplinary findings had been upheld. Issue 14e. Mr Chedin’s original proposal of demotion being increased to dismissal at the behest of third parties, namely Mr. Spitz[402]The tribunal accepts that this is potentially a detriment. The telephone conversation between Mr Chedin and Ms Sqalli on 26 May 2020 will be considered in much more detail in relation to the unfair dismissal claim. Suffice to say at this stage that we have not been presented with sufficient evidence that either Ms Sqalli or Mr Spitz were aware of the claimant’s disclosures of information in PD1 and PD2, at the time of that conversation. Even if we had been, the tribunal panel are satisfied that Ms Sqalli did not influence Mr Chedin’s decision, for the reasons set out below. The tribunal is satisfied therefore that there was no causal connection between the first two protected disclosures and the content of that telephone call on 26 May 2020. Issue 15 – post-termination detriments[403]We are asked to reach conclusions in relation to the following alleged posttermination detriments. Issue 15 b. Unreasonable delay in acknowledging and providing a response to the Claimant’s Equality Act questions[404]The tribunal accepts that the failure to provide early answers to many of the Equality Act questions is unsatisfactory and amounts to a detriment. We refer to our findings of fact above, that contrary to the respondent’s assertion, it was not necessary to wait until the conclusion of the appeal to answer many of the questions, because the answers to those questions were not dependent on the findings in relation to the appeal.[405]Having said that, the tribunal also concludes that when the decision was made to delay the reply to most of the EQuA questionnaire questions, no-one had envisaged that the appeal process was going to take until May 2021 to complete. We are reminded of the advice from the appeal courts that in a discrimination case, a difference in treatment, and difference in protected characteristic, is not sufficient to raise a prima facie case of direct discrimination. We consider that a similar approach is appropriate in relation to a protected disclosure detriment/dismissal claim.[406]In cross-examination, the claimant was not able to say what the connection was between his protected disclosures and these alleged detriments. Similarly, the tribunal cannot see what the potential connection is between the respondent’s admitted failure to answer the EQuA questionnaire questions earlier, and any of the protected disclosures having been made. Indeed, the tribunal concludes that it is far more likely that the reason was a matter of tactics; and/or that the Bank wanted to protect its position in relation to the appeal and the tribunal proceedings. A prima facie case not having been made out, the tribunal does not consider that the burden of proof has shifted to the respondent. Issue 15c. When a response to the Equality Act questions was eventually provided on 22nd October 2020: i. answering only some of the Claimant’s questions; ii. diverting others to be determined by the appeal officer; iii. setting out incorrect facts in answers which were given; and iv. the appeal officer in the appeal hearing having no knowledge of the Equality Act questions which he had been apparently tasked to answer.[407]We refer to our above conclusions in relation to these detriments (which we conclude they were). We conclude that the decision to answer only some of the questions was partly tactical, and partly because of the erroneous belief that there was a link between all of the other questions which remained unanswered, and the issues raised by the appeal. As for the incorrect answers, that was because of an honest mistake made by the respondent. It had nothing to do with the protected disclosures.[408]As for the appeal officer not being aware of the Equality Act questionnaire questions during the first meeting with the claimant, that was because he was not at that stage fully on top of his brief. That was understandable, given the complexity of the issues and the amount of documentation provided to him. Again, the tribunal is satisfied that his lack of knowledge had nothing to do with the appeal officer knowing that the claimant had raised potential protected disclosures, and being determined to subject him to a detriment by not being on top of his brief.[409]Finally, on this issue, we again note that when questioned by the respondent’s counsel at the hearing, the claimant was not able to say what the possible causal connection was between any of the protected disclosures and the above issues. Issue 15 f. Withholding important documents which were properly responsive to the Claimant’s Subject Access request[410]We refer to our conclusion above in relation to issues 15b and c. Similar considerations apply here. We accept that this is a detriment.[411]It is accepted that Mr McLean could have been more proactive, in bringing to the attention of those dealing with the claimant’s DSAR, some of the documents which were not provided initially. However, this was an extremely complex and time-consuming request, involving the disclosure of, we were told, about 15,000 pages of documents. It is not surprising, in a disclosure exercise of that magnitude, that there were some documents missing. Indeed, it would be surprising if there were not. The claimant was able, through his solicitors/on his own initiative, to point out where he considered documents were missing. Further searches were subsequently carried out.[412]Again, the Tribunal concludes that the making of the alleged protected disclosures, and the late disclosure of certain documents, is not enough to raise a prima facie case. Again, the tribunal can in any event find no apparent connection between the detriment alleged, and the alleged protected disclosures. Yet further, the tribunal has not found as a fact that any documents were deliberately withheld. The tactics used by Mr Maclean and colleagues in emails to make certain documents less likely to be identified in a DSAR search, we accept on the basis of his evidence, are standard practices. The tribunal would question whether or not such practices are appropriate. Regardless of the answer to that question, it is apparent that the application of those standard practices had nothing to do with the alleged PDs. The claimant was not treated any differently to the way any of his colleagues would be treated, if they raised a DSAR. Issue 15h. Failing to provide prompt and/or promised replies to the whistleblowing investigation[413]The tribunal accepts that this could be a detriment. Again however, the tribunal concludes that a prima facie case has been made out. At the outset of Project Medway, it was agreed that the claimant would be provided with a summary of the findings. A summary is what was provided. It is clear from the facts found above, that consideration was given as to what the claimant should be told, once the final report had been concluded. In principle, the tribunal considers that the full report, suitably redacted, could have been provided to the claimant, rather than a summary. There are perhaps lessons to be learned in that regard. However, the tribunal concludes that there is no causal connection between any of the alleged protected disclosures having been made, and the decision to provide a summary report. Issue 15i. In relation to the Project Medway findings, providing Mr de Lambilly with only the limited summary outcome, which failed to identify any of the disadvantage experienced by those working from home without an HTP kit[414]See 15h above. The same conclusions apply. Issue 15j. Mr de Lambilly accepting without further questioning Mr Chedin’s evidence that the introduction of a fourth allegation was insignificant and ‘quite redundant’, in circumstances where the fourth allegation had been set out in terms to the(i) RBAC,(ii) RBAC Sub-Committee, and(iii) the FCA[415]The tribunal accepts that this was a detriment. Again however, the tribunal cannot find any causal connection between the detriment and the alleged PDs. The issue is potentially relevant to the unfair dismissal claim and will be discussed further below. Issue 15k. The appeal officer, Mr de Lambilly, failing to conduct a genuine investigation, or to give genuine consideration to the matters raised on appeal, instead adopting an approach which was designed to superficially remedy the palpable defects in the disciplinary process (and thereby defeat the Claimant’s unfair dismissal claim) but without genuinely considering the issue of substances to which the appeal gave rise[416]The tribunal accepts that this is potentially a detriment. However, the tribunal does not accept that the investigation was not genuine or that Mr de Lambilly did not give genuine consideration to the issues. The interviewing of eleven witnesses, the consideration of thousands of pages of documentation and four separate appeal submissions, which were comprehensively dealt with in an 18 page appeal outcome decision letter, cannot reasonably be described as disingenuous, or superficial.[417]Mr de Lambilly properly conceded during cross examination that more could have been done. For example, by requesting a full copy of the Project Medway report and interviews; and providing Mr McCauley and Mr Ward with copies of the Bloomberg chats and emails referred to, when questioning them about them. The potential relevance of such issues to the unfair dismissal claim will be considered in due course. Further, in relation to the Covid-19 working arrangements, Mr de Lambilly concluded that the claimant could still make phone calls, send and receive emails whilst working from home, and was physically in the office on 26 and 27 March. Further, he found that the claimant could have used those methods to escalate the EFP dislocation issue, had he considered it necessary to do so. Seeing the full Project Medway report and interviews would not, in the Tribunal’s judgment, have changed Mr de Lambilly’s conclusions in that regard. Issue 15l. Failing to overturn the Claimant’s dismissal, despite the starkly disparate treatment of Mr Louis McCauley and/or Mr Tony Botting which the Claimant had raised as a ground of appeal 418 it is accepted that this is potentially a detriment. Again, we will look in more detail at Mr de Lambilly’s conclusions about the claimant’s appeal against dismissal in relation to the unfair dismissal and discrimination/victimisation issues. Suffice to stay at this stage, that on the basis of the evidence before the tribunal, the Tribunal accepts that Mr de Lambilly’s decision in relation to the appeal was based on his view that there were important differences between the claimant, Mr McCauley and Mr Botting.[419]As for Mr McCauley, Mr de Lambilly took the view that whilst Mr McCauley could be criticised for not raising the matter earlier, he did raise the PnL issue on 30 March, whereas the claimant did not. The tribunal is not convinced that had Mr McCauley not raised the issue on 30 March, that the claimant would have done so on that day. We note that according to Mr McCauley’s interview with Mr de Lambilly in February 2021, that Mr McCauley said that when Tony Botting had asked the claimant what the position was in relation to futures, the claimant had at first denied that there was any loss at all.[420]Whether those were reasonable conclusions for Mr de Lambilly to come to will be considered in due course. At this point, however, it suffices to say that the Tribunal does not consider there to be any causal connection between the conclusions that Mr de Lambilly came to on the appeal, and the claimant’s alleged protected disclosures. Issue 16 a – Refusing to correct the terms of the Form H (as set out in the Respondent’s representative’s letter dated 19 August 2021), in particular failing to provide ‘complete’ information about the gold volatility episode to the FCA, or to provide an explanation of why inaccurate information was originally supplied in November 2020, and in fact misleading the regulator that any corrections were linked to the appeal process.[421]The tribunal is not convinced that this amounts to a detriment. From evidence given by the claimant during cross examination, it appears that the main impediment to him finding other work, is that when he mentioned he had been dismissed for misconduct, potential employers and/or head-hunters were no longer interested in his application. It is that fact that appears to have been the main impediment, to him obtaining other work, rather than the fact that a conduct rule breach has been found. Further, the lack of information has not led the FCA so far to undertake an investigation into the claimant’s conduct.[422]In any event, the claimant has failed to raise a prima facie case in relation to this issue. Yet further, the tribunal is quite satisfied that the reason Mr Cooper provided the limited information that he did in Form H, was that he considered, on the basis of his knowledge and experience, that it was the appropriate thing to do. The tribunal further accepts Mr Cooper’s evidence that he was simply treating the claimant’s case in the same way he would treat any other employee, in a senior manager role, against whom disciplinary allegations had been upheld. His practice is to provide limited information and his experience is that the more information provided, the more likely it is that the FCA will investigate further. The Tribunal is satisfied that none of this is connected in any way to the claimant’s alleged protected disclosures. (c) Automatically unfair dismissal Issue 17 - Was the reason or principal reason for the Claimant’s dismissal that he had made a protected disclosure (namely Disclosures 1 and/or 2)?[423]By the time of the claimant’s dismissal, the disclosures of information which form PD’s 1 and 2 had been disclosed. Regardless however of whether they amount to protected disclosures, the tribunal concludes on the basis of the findings of fact, that the reason for the claimant’s dismissal was his failure to escalate the issue a reason related to conduct. The tribunal considers the fairness of that dismissal for that reason below. The tribunal concludes however that the reason for the dismissal was the failure to escalate. Further, the Tribunal is satisfied that the dismissal was not connected to the claimant’s alleged protected disclosures. Unfair dismissal – (s.94 ERA) Issue 18 – potentially fair reason[424]The Tribunal concludes that the reason for the claimant’s dismissal was a reason related to conduct, namely the alleged failure to escalate the EFP breakdown with Mr Botting prior to 30 March 2020.[425]The tribunal was unconvinced by the respondent’s alternative argument that the reason was some other substantial reason (SOSR) due to loss of trust and confidence. Any purported loss of trust and confidence was linked to the alleged conduct issue and that remains therefore the substantive reason for the claimant’s dismissal. Issue 19 - fairness (s98(4) ERA) Issue 19a - was the investigation undertaken by Behnouche Mostachfi unfair, i. Mr. Mostachfi was not independent or impartial, and had wrongfully informed others (including Ms David, Mr Blondeau and Mr Spitz) that the Claimant failed to inform Mr Assaf of any risk; ii. He did not conduct any interviews of any witnesses;[426]We start by noting that the range of reasonable responses test applies and that is referred to for reasons of brevity below as ‘The Range’.[427]The tribunal concludes that it was manifestly inappropriate for Mr Mostachfi to have been appointed to carry out the investigation. He had taken the view that the claimant was dishonest and that he had failed to escalate the EFP breakdown on 25 March when Mr Assaf visited the desk. He remarked on 9 April that his ‘blood [wa]s still boiling’. He clearly lacked the objectivity necessary to carry out an independent and reasonable investigation.[428]That lack of objectivity and lack of reasonableness in the investigation is reflected in Mr Mostachfi’s failure to carry out interviews with key witnesses, namely Tony Botting, Mr Assaf, and Mr McCauley despite his report stating that he had.[429]We conclude that the investigation was unfair for these reasons. We further conclude however that had an independent investigation been carried out, it is still likely that the matter would have been escalated to a disciplinary hearing. Issue 19 b - was the disciplinary process undertaken by Laurent Chedin unfair, having regard to the following contentions by the Claimant:- i. Mr. Chedin failed to conduct any interviews with witnesses suggested by the Claimant; ii. Mr. Chedin laboured under fundamental misapprehensions of fact throughout the disciplinary process, namely:-(a) reporting to the RBAC that 4 allegations of misconduct were considered by him, when only 3 were ever put to the Claimant;(b) reporting to the RBAC that 3 allegations had been upheld, when in fact he had upheld only two;(c) basing his advice on a mistaken view that the Claimant failed to escalate to Mr. Assaf in person on his visit(s) to the desk, when in fact the Claimant was not present for any such visit.[430]It is not disputed that Mr Chedin did not interview witnesses suggested by the claimant, in particular, Phil Lawrence, Head of MAM Murex, Lilian Chaplain Head of DRM and the PMD traders James Donaldson and Joseph Ward. We conclude that was unfair.[431]We have found that Mr Chedin was, until after his decision to dismiss had been taken, proceeding on the basis that there were four allegations, not three. The tribunal does not accept that this made no difference on the basis that one of the allegations was simply an amalgamation of the other two. Since that was indeed the case, there were in effect three allegations and only those three allegations should have been put to the claimant, not four. Had the allegations which had been set out in the invitation to the disciplinary hearing letter been considered by Mr Chedin, he would have told the RBAC meeting on 10 June that two out of three allegations were upheld (two thirds), not three out of four (three-quarters). That does in the tribunal’s judgment matter. As does Mr Chedin’s failure to make it clear to the claimant that he was considering four and not three allegations during the disciplinary hearing. The fact that the dismissal letter correctly referred to three allegations does not change the fact that when the decision was made, Mr Chedin had in mind four allegations, of which three were upheld.[432]The tribunal further concludes, on the basis of our findings of fact, that Mr Chedin did believe, at the time that he made the decision to dismiss, that the claimant was present on the desk during Mr Assaf’s visit on 25 March. Again, that was corrected by the time that the dismissal letter was sent out but the decision to dismiss had been taken well before that. Issue 19b.iii. Mr. Chedin glossed over the Claimant’s disclosure that the Respondent had failed to implement adequate systems or controls by its rotation arrangements;[433]The tribunal concludes that Mr Chedin did not gloss over that disclosure. Mr Chedin was aware from his own experience in the early stages of the pandemic that there were issues with working from home. The members of the tribunal experienced the same difficulties during the same period. The respondent’s rotation arrangements were implemented in order to protect the health of staff. That was bound to affect productivity, but the health of staff was the priority at that time.[434]The move to a an effective working from home environment inevitably took some time to implement, given that home working was previously very much the exception and traders were not allowed to trade from home. The tribunal further concludes that whilst understandably, it did take some weeks for the respondent’s employees to be able to work from home effectively, it was not that which prevented the claimant from escalating the EFP breakdown issue. Had the claimant considered that he needed to report the issue, he could have done so by phone or email between 23-25 March or on 26 or 27 March, by talking to Mr Botting. We note that the claimant was able to email Mr Botting on 25 March in reply to his email on the issue. Issue 19b.iv. Mr. Chedin failed to consider (as directed by the RBAC on 1st April 2020) whether Louis McCauley had culpably failed to escalate risk;[435]The tribunal has not found as a fact that the RBAC on 1 April 2020 directed Mr Chedin to consider whether Mr McCauley failed to escalate risk. On the contrary, we find that no such direction was given. Mr Chedin was only asked to investigate allegations against the claimant, which he did. Whether there was inequitable treatment will be considered below. Issue 19b.vi. Mr Chedin’s decision making in general, and the increase in his original proposal of demotion to dismissal, was influenced by third parties, namely Mr. Spitz, in circumstances where Mr Spitz had decided that the Claimant was to be dismissed by 30 March 2020 (prior to any disciplinary process starting);[436]This allegation is predicated on the theory that there was a strategy by senior managers to remove the claimant from the start of the escalation of the PnL issue on the PM Desk. It is the case that a number of senior managers made a number of unguarded comments to the effect that the claimant should be sacked. Such comments were in part due to an assumption at that stage of possible ‘rogue trading’ and/or dishonesty on the part of the claimant. Further, they were made on the day when it had been discovered that the bank was facing a potential loss of tens of millions of dollars, and those managers seemed determined that someone should ‘pay’ with their job.[437]Such comments, though understandable in the heat of the moment, were nevertheless unfortunate. It is not surprising that the claimant concluded, on the basis of the transcripts of those interviews, that the outcome of the disciplinary process had been pre-determined. On the basis of the facts found by the tribunal however, the tribunal concludes that senior managers, and in particular Mr Spitz, did not exert any material influence over Mr Chedin following his appointment. We conclude, on the basis of our fact findings, that the dismissal decision was taken by Mr Chedin alone. That the clamant was sacked no doubt aligned with the views of GMD (including those of Mr Spitz and Ms Sqalli). But it was not GMD’s decision to make.[438]We note that after Mr Chedin’s appointment, Mr Spitz no longer appeared to be taking an active interest in the process. We conclude that was because of an acceptance by him that the disciplinary process had to be allowed to take its course, rather than because he had told Mr Chedin to sack the claimant and he knew Mr Chedin would comply.[439]The Tribunal notes that the conversation with Ms Sqalli on 26 May 2020 took place on her instigation, not Mr Chedin’s. Having considered the transcript of the conversation between Mr Chedin and Ms Sqalli extremely carefully however, the Tribunal concludes that Mr Chedin was not influenced by Ms Sqalli in relation to the decision to dismiss. We conclude that during the conversation, Mr Chedin used Ms Sqalli as a sounding board. The decision to dismiss remained his alone. Had there been an intention by Ms Sqalli during that conversation to directly influence Mr Chedin, we would have expected there to have been much more direct language used. Such language is notably missing from the transcript. The transcript is discussed in more detail below.[440]A legitimate question was raised on behalf of the claimant as to why Ms Sqalli was not called as a witness. The Tribunal concludes however that the most likely explanation for this is because Mr Chedin would have confirmed to the bank’s legal advisers, just as he confirmed to us, that the decision was his alone. We have concluded that is the case, having considered the transcript.[441]A further question was raised as to why Mr Chedin failed to mention the call to Mr de Lambilly or the respondent’s solicitors. We conclude that was because he had forgotten about the call, not because he was deliberately concealing it. There was, in the Tribunal’s judgment, nothing to conceal.[442]As noted in the fact findings, Ms Sqalli made a comment at the outset of the call as follows: I wanted to understand a little of where you were in your reflection on this case which takes a little time to be settled for reasons that have nothing to do with the subject ... it’s rather the current circumstances which are a little more complicated to manage [D2007]. The Tribunal concludes that this is a reference to the pandemic affecting the timescales of Mr Chedin’s investigation.[443]Mr Chedin did discuss during the call [D2013] the possibility of either dismissing the claimant or demoting him. There then followed a discussion of how to avoid a situation whereby the claimant remained in the Bank’s employment but then left of his own accord, and represented to a new employer that there had been no disciplinary issues during his employment with the respondent.[444]The tribunal also notes at [D2015] Ms Sqalli stated to Mr Chedin: So whatever happens, and independently of the outcome and the decision you'll make, and if I understood correctly at the minimum it's a demotion. Ms Sqalli then confirms that whatever the outcome, there would still be a regulatory reference in the claimant’s file, which would be provided to any prospective employer. We conclude that Ms Sqalli would not have used the words quoted, if it was her intention during the call to ensure that the outcome was dismissal and not demotion. We further conclude that the facts of this case do not suggest a plan by GMD to dismiss the claimant, as a result of protected disclosures made by the claimant; a plan which Mr Chedin then simply went along with (see Fairhall). The facts found do not in the tribunal’s judgment come close to establishing that sequence of events. Issue 19c - was the RBAC’s involvement in the disciplinary matters relating to the Claimant flawed and unfair, having regard to the following contentions by the Claimant:- ii. Mr. Cooper (UK Head of Compliance) advised the RBAC, based on wrong information presented by Laurent Chedin, that the Claimant had committed three very serious breaches amounting to a Conduct Rule breach; iii. Mr. Cooper was then appointed to independently investigate and determine the Claimant’s whistleblowing concerns, when he was not properly independent;[445]The Tribunal has already concluded that the decision to dismiss was made by Mr Chedin. Mr Chedin reported his findings to the RBAC on 10 June 2020, in relation to a possible conduct rule breach. Mr Chedin’s decision to dismiss the claimant had already been made by then.[446]As for the claimant’s whistleblowing concerns, Mr Cooper was not appointed to lead the Project Medway investigation (although he did have oversight of it). In any event, the tribunal concludes that the Project Medway investigation was not connected in any way with the claimant’s dismissal. Issue 19d - did the Respondent unfairly classify as serious misconduct the Claimant’s failure to escalate risk in accordance with a valuation model which the Respondent(a) did not utilise in relation to gold futures positions, and(b) had refused to adopt in 2015/2016?[447]The Tribunal concludes that the disciplinary allegations were properly classed as serious misconduct because the claimant failed to escalate a potential issue with the valuation model which was being used at that time. The tribunal accepts that the claimant genuinely did not believe he needed to escalate the EFP breakdown issue because he considered that it would resolve itself once trading on the June contract commenced, and he was waiting to see what happened when trading on that contract started in earnest, from 31 March onwards. The tribunal also accepts however that the respondent was entitled to consider that to have been an error of judgment on his part. Whether that justified his dismissal is another matter. Issue 19e - did the Respondent fail to take into account its own alleged failure to comply with the FCA’s requirement of adequate business continuity planning, particularly in relation to(a) provision of equipment and resources, and(b) communication methods, in advance of the onset of the Covid-19 crisis?[448]We refer to our conclusions above, that there was a time lag between the commencement of the first lockdown, and the respondent having systems in place to enable effective working from home. Given the unprecedented circumstances of the pandemic, that was understandable. The claimant did have sufficient access to information to know that there was a potential problem. He also had sufficient resources to raise the issue, by phone or by email; or in person on 26 or 27 March. Issue 19f - did the Respondent unfairly cast the reason for dismissal as ‘some other substantial reason’ based on ‘serious misconduct’, thereby circumventing its own disciplinary policy, which fairly applied would not have resulted in the Claimant’s dismissal?[449]The tribunal concludes that it was unfair to rely on some other substantial reason namely loss of trust and confidence in the circumstances of this case. Mr Chedin correctly categorised the misconduct as serious misconduct. He did not find that it was gross misconduct. That is inconsistent with a suggestion that there had been a breach of the implied term of trust and confidence; such a breach would by definition amount to a repudiatory breach of contract, and therefore gross misconduct. There is therefore a serious inconsistency in the respondent’s position. That is a matter we will return to in our overall conclusion on the unfair dismissal issue. Issue 19g - was the Respondent’s rejection of demotion as an alternative to dismissal based on factually incorrect or otherwise flawed grounds?[450]We refer to our findings of fact. We conclude that Mr Chedin failed to properly investigate this issue. We further conclude that Mr Botting was unreasonably trying to deflect all blame for the failure to escalate the EFP breakdown onto the claimant, to protect his own position, a position which should have been obvious to Mr Chedin. Mr Chedin failed to ask Mr Botting about the claimant’s email to him of 24 March. In particular, whether he would have known that the PM Desk was holding forwards contracts for June and beyond, not just April contracts; and why Mr Botting did not question the claimant further, following receipt of the email, in light of that knowledge. Failure to question Mr Botting about such an obvious and important issue was in the tribunal’s judgment, outside The Range. Issue 19h - was the appeal process undertaken by Mr Eric de Lambilly unfair, ii. Mr de Lambilly failed to overturn the dismissal, notwithstanding the significant issue raised by the Claimant on appeal about the starkly disparate treatment of himself when compared with Mr McCauley (who was not disciplined at all, and was in fact promoted) in circumstances where Mr McCauley: 1. Was subject to an identical obligation in his Position Mandate as the Claimant to risk escalation; 2. Mr McCauley was familiar with the Mark-to-Market model, as he had worked with the model in previous employment, unlike the Claimant, who had never worked with it before; 3. Mr McCauley had failed to report on any Mark-to-Market risk in his Options book daily wrap up emails on either 24 or 25 March 2020 (a failure for which the Claimant was criticized in relation to the Forwards daily wrap up emails); 4. Mr McCauley failed to escalate any concerns on 24 and/or 25 March to Mr Assaf when asked specifically about the gold futures position, and possibly during a second visit by Mr Assaf that week; 5. While Mr McCauley denied any knowledge of the desk’s Forwards position (this being a matter relied upon by Mr de Lambilly in his appeal outcome), both Mr McCauley’s manager, Mr Botting, and his colleagues, Mr Ward and Mr Donaldson, said in their appeal interviews that Mr McCauley was aware of the desk’s position, and Mr McCauley admitted as much in a call with Mr Mostachfi on 30 March 2020;[451]The tribunal’s conclusions on the above issues are as follows. First, whilst Mr McCauley’s obligation in his Position Mandate was the same as the claimant, the claimant was in charge of the desk and managed the other members of the team. Notwithstanding that, it is still the case that Mr McCauley did not raise any issue with the claimant until his email of 29 March 2020. Further, when he did so, he informed the claimant that he had arranged to go into the office to speak to Tony Botting about it, rather than speaking to the claimant first, by phone or otherwise. Mr McCauley had the opportunity to raise the issue with Mr Botting between 23 and 25 March 2020, when he was in the office.[452]As for the visit of Mr Assaf to the desk, Mr Assaf admitted before us that his question to Mr McCauley could have been clearer, by specifically asking about the effect of the EFP volatility on the June Forwards contracts (having been told that the April contracts had been ‘rolled’ [D1207]. Had the right questions been asked on 25 March, the PnL issue would probably have been identified earlier. We mean no criticism of Mr Assaf in saying that - it is always easier to be wise after the event. The claimant was not however afforded the same benefit of the doubt during the disciplinary process.[453]It is clear to the tribunal from Mr McCauley’s email of 29 March 2020, that he recognised there was an issue, prior to 29 March. Mr McCauley had worked with Mark to Model on a previous occasion, and was aware of previous EFP breakdowns (although not of the same magnitude). The issue would nevertheless have been more readily apparent to him. Yet further, it was Mr McCauley who attended the Risk Committee meetings in 2019, to argue that the risk valuation method used by the PM Desk should be changed.[454]None of the members of the PM Desk, including Mr McCauley, specifically raised the potential issue with the PnL valuation in the eod emails. However, all of the emails between 24 and 27 March, referred to in our findings of fact above, reported the high level of the EFP on those days.[455]Mr de Lambilly agreed during cross examination that Louis McCauley failed to escalate the issue between 23 and 25 March although the size of the loss on his book was smaller, and he did escalate on 30 March. The tribunal notes that the loss on Options Futures still ran into million of pounds, a significant sum. Mr de Lambilly was told by Mr McCauley that he did not know the size of the Forwards position. That was not correct – Mr McCauley told Mr Chedin during his interview that he has access to Risk Engine and he could see the positions. This was made clear to Mr de Lambilly by the claimant during the April 2021 appeal meeting and that inconsistency should have been noted by him. iii. Mr de Lambilly failed to overturn the dismissal notwithstanding the significant concern raised by the Claimant on appeal as to the starkly disparate treatment of himself when compared with Mr Botting (who was not disciplined at all, and was allowed to exit his employment with the Respondent on agreed terms), in circumstances where Mr Botting: 1. Was aware of the gold futures dislocation as it was happening; 2. Was aware of the size of the desk’s position, as he had authorised it only months earlier; 3. Had previously been the Head of Desk for Precious Metals until early 2020, and well understood the technical issues relating to the Mark-to-Model system; 4. Mr Botting had been privy to emails seeking to change the system from Mark-to-Model to Mark-to-Market in 2015; iv. In relation to the Project Medway findings, Mr Cooper provided Mr de Lambilly with only his limited summary outcome, which failed to identify any of the disadvantage experienced by those working from home without an HTP kit; v. Mr de Lambilly accepted without further questioning Mr Chedin’s evidence that the introduction of a fourth allegation was insignificant and ‘quite redundant’, in circumstances where the fourth allegation had been set out in terms to the(i) RBAC,(ii) RBAC Sub-Committee, and(iii) the FCA; vi. Mr de Lambilly failed to conduct a genuine investigation, or to give genuine consideration to the matters raised on appeal, instead adopting an approach which was designed to superficially remedy the palpable defects in the disciplinary process (and thereby defeat the Claimant’s unfair dismissal claim) but without genuinely considering the issues of substance to which the appeal gave rise.[456]The tribunal has found as a fact that the matters set out at iii. 1 to 4 above are correct. Further, we conclude that it would have been clear to Mr Botting from the claimant’s email of 24 March 2020 that he was referring to the April Futures contracts only. Mr Botting failed to ask any further questions of the claimant following receipt of that email.[457]Mr Chedin told us that Mr Botting would have been reassured by that email. The tribunal disagrees, in the light of Mr Botting’s knowledge and experience and such a conclusion was outside of the Range. Mr de Lambilly told us that the claimant should have mentioned the June position. Equally however, Mr Botting should have specifically asked the claimant about that, given his knowledge of the size of the Futures position on the PM Desk, given the large increase in the number of lots allowed under the risk mandate. As noted above, none of this was considered or explored by Mr Chedin.[458]It is a fact that Mr de Lambilly was only provided with the summary of the Project Medway findings. Both he and Mr Cooper acknowledged that the full report could have been provided. However, even if it had been, then for the reasons given above in relation to issue 19b.iii., the Tribunal concludes that would not have made a difference to the outcome.[459]As for the fifth allegation, the tribunal does consider that to be a significant matter, for reasons which will be further discussed below.[460]Finally, the tribunal concluded that whilst Mr de Lambilly could have done more, his investigation was comprehensive, and it was genuine. It was not superficial. Whether the investigation and appeal outcome, considered in the context of the dismissal process as a whole, means that the dismissal was fair is an issue to which we now turn, in our overall conclusion on the fairness of the dismissal. Overall conclusion on the fairness of the claimant’s dismissal[461]Before coming to our overall conclusions, the tribunal has again reminded itself of the wording of section 98 (4) Employment Rights Act 1996; and that the range of reasonable responses test applies (‘The Range’). The tribunal also notes however that The Range does not amount to a perversity test - see paragraph 49, Post Office and others v Foley and others, [2000] IRLR 827. (That was not specifically raised with either counsel, but we do not anticipate that is a disputed principle of unfair dismissal law. If either counsel disagrees, a reconsideration request can be made). The tribunal also notes in particular that where an individual’s career could be blighted, as in this case, as evidenced by the claimant’s failure to find further employment since his dismissal in a British Bank, the standard of investigation must be high - see paragraph 88 of Annex B below and the reference to the Raldon decision.[462]Bearing in mind those legal principles, the Tribunal concludes that the dismissal was unfair for the following reasons:462.1 As noted above, Mr Mostachfi’s investigation was inadequate. The tribunal has concluded that it was likely that a disciplinary hearing would still have been held. The deficiencies in Mr Mostachfi’s investigation placed more onus on Mr Chedin to carry out a more effective investigation himself.462.2 We find however that Mr Chedin’s own investigation was also inadequate. He failed to interview witnesses suggested by the claimant, including Phil Lawrence, Lillian Chaplin, James Donaldson and Joseph Ward. The reason for this was Mr Chedin’s narrow focus in the investigation. That narrow focus took his investigation outside of The Range. In saying that and what follows, we do not seek to criticise Mr Chedin, who we do not doubt undertook his role with honesty and integrity. It is however our job to analyse carefully Mr Chedin’s decision, and the process by which he came to it, in deciding whether the dismissal was fair. That is particularly important where, as in this case, the dismissal of the claimant has made it extremely difficult for him to obtain further employment in a similar role.462.3 Mr Chedin’s interview with Mr McCauley focused on the claimant’s capability. That is surprising, since it was not an issue which Mr Chedin had been asked to investigate. Mr Chedin did not put any of his doubts about the claimant’s competence as a Desk Head to the claimant, despite forming firm conclusions on them, which then influenced his decision on demotion/re-engagement elsewhere. That was outside the Range.462.4 As noted in our findings of fact, the claimant did accept during the disciplinary process that, in retrospect, he wished he had escalated the EFP breakdown issue and its potential effect on the PnL of the PM desk before it was raised by Mr McCauley on 29 March 2020. By the time of the appeal, the claimant put forward detailed arguments as to why it was not apparent, prior to that date, that he should have raised an issue earlier, due to the uncertainty about the price of the June Forwards contracts prior to trading on those contracts commencing in earnest at the end of March. The tribunal accepts that it would be substituting its own opinion for that of the respondent, to find that the respondent should necessarily have concluded that was a reasonable position for the claimant to take. Instead, the tribunal pays due deference to the conclusion of the respondent that the claimant should have raised the matter earlier and that it amounted to serious misconduct. The failure however to consider the allegations in their proper context, as explored further below, takes the decision to dismiss outside of The Range.462.5 During the disciplinary process, Mr Chedin focused on individual failings by the claimant and failed to consider the actions of the claimant in the context of the unprecedented circumstances of the pandemic; the unprecedented breakdown in the EFP; the failure by Mr McCauley or Mr Botting to escalate the issue (see further below); and the known issues with the valuation model used by the PM Desk, which had been questioned both in 2014/15, and in 2019, at which point a change to a mark to model approach was rejected on the grounds of cost. Again, those omissions were outside of The Range in the circumstances of this case.462.6 As for the Valuation Policy, the tribunal concludes that it was outside of The Range for Mr Chedin to focus in a narrow way on the claimant’s own failure to escalate, when there were clear systemic failures by the bank which led to the failure to identify the PnL loss on the PM Desk before 30 March. These included, as noted above, the two previous occasions when potential problems with the model had been raised. Despite those concerns being raised, a more robust model had not been adopted. The PM Desk was the only desk in London not to use a Mark to Model approach based on actual prices. We also refer to the findings of fact at paragraph 154 above, and the comment by Mr Reynier that MAM should have made some extra effort to check the PM Desk valuation. That was not taken into account.462.7 The tribunal concludes that none of these systemic issues were properly explored or considered by Mr Chedin because of his narrow focus on the individual failings of the claimant and not the wider context within which they could occur. Again, this was outside of The Range.462.8 As to the question of inconsistent treatment, the tribunal does not consider that this is a case where it could reasonably arrive at the conclusion that the dismissal was unfair because the claimant was dismissed but Mr McCauley was not. It is apparent that a decision was taken not to carry out any disciplinary investigation in relation to Mr McCauley, because he had, albeit belatedly, raised the issue on 30 March and was subsequently classed as a whistle-blower. That did not however preclude Mr Chedin from questioning Mr McCauley why he failed to escalate the issue between 23 and 25 March 2020, and in particular, during the visit by Mr Assaf to the desk. Nor why Mr McCauley failed to raise the issue in any Bloomberg chats or emails, prior to his email to the claimant of 29 March 2020. The tribunal concludes that it was outside of The Range for Mr Chedin not to take into account these clear failings by Mr McCauley, despite him knowing that there was an issue, prior to 29 March 2020. That was a consideration which he should have taken into account when considering the allegations against the claimant. The claimant was clearly not alone in failing to escalate. He did not do so because he did not consider it necessary. Mr McCauley did see a problem earlier, but failed it at this time. These failings also took the decision outside of The Range.462.9 Similarly, we conclude that it was outside of The Range for Mr Chedin not to take into account or explore in any way, the failure of Mr Botting to raise further questions with the PM desk, and/or to raise further questions of the claimant following receipt of his email of 24 March. Those failings on Mr Botting’s part should have been readily apparent to him, had he not had adopted such a narrow focus. It is inconceivable that Mr Botting, having previously agreed an increase in the number of lots from 10,000 to 25,000, would not have been aware that the PM desk held significant forward positions beyond the April contracts. Yet Mr Botting failed to ask any follow up questions, although it was clear from the content of the 24 March 2020 email from the claimant, that the claimant was focused in his reply on the April contracts only, and not the June and later contracts. Mr Chedin told us that Mr Botting would have been reassured by the email. Given our findings of fact and conclusions above, we consider that conclusion to be untenable, a consequence of his narrow focus, and outside of The Range.462.10 Similarly, in the context of the systemic failures, Mr Chedin failed to consider that Mr Assaf, having been specifically told by Mr McCauley that they had rolled what they had on the April contract, failed to ask whether they had any positions for June and beyond. As stressed above, that is not meant as a criticism of Mr Assaf. It is however a further example of systemic failures by the bank. A number of people could have done more at the time; but the focus has been solely on the individual fault of the claimant. The oversights by others including Mr McCauley, Mr Botting, Mr Assaf, MAM and Risk Management, were over-looked or forgiven. Those of the claimant have not and he has paid with his job, and to a large extent, his career. This was outside of The Range.462.11 Mr Chedin found that the claimant’s misconduct amounted to serious misconduct, not gross misconduct. Mr Chedin acknowledged before us that he did not consider the terms of the disciplinary policy before dismissing the claimant. Under the terms of the disciplinary policy, paragraph 5.2.3, a final written warning should have been given. The tribunal does of course accept that section 98(1) refers to ‘conduct’, not gross misconduct. There will no doubt be circumstances where dismissal for serious misconduct is within The Range. Given the clear terms of the respondent’s disciplinary policy however, the length of his employment and his exemplary record and service, we conclude that it was outside The Range for Mr Chedin not to apply the clear terms of the disciplinary policy in the circumstances of this case. As noted above, we have rejected the alternative suggestion that dismissal could be justified because of a breakdown of trust and confidence.462.12 In the unprecedented circumstances of the pandemic, the claimant and the other members of the PM desk worked extremely hard, in extremely difficult circumstances, to minimise the losses to the bank, during the period of home working. Again, Mr Chedin unreasonably focused on the failure to escalate by the claimant, without considering at all, the efforts he and his team had gone to during the relevant period to minimise loss. It is worth emphasising again, that the loss that the bank did realise was not caused by the failure to escalate the EFP breakdown issue earlier. The loss was caused solely by the EFP breakdown, and the Bank’s subsequent decision (which of course was the Bank’s to make) to unwind the positions within weeks of the loss being discovered. That was a decision over which the claimant and his colleagues had no control.462.13 The claimant had ten year’s unblemished service with the respondent, during which he had helped to build up the Bank’s business. The increase in the number of lots that could be held by the PM Desk from 10,000 to 25,000 shortly before the pandemic is a reflection of the success of the Desk and the regard in which it was held.462.14 The conclusion of Mr Chedin that trust and confidence had been lost was outside of The Range in the Tribunal’s judgement. Mr Chedin argued that this was because the claimant could not be trusted to raise an issue if there was one in future; that was clearly contradicted by the 15 April investigation meeting see paragraph 171.10 above, when the claimant confirmed that he would escalate in future; and the claimant’s email to Ms Smith - see paragraph 177 above - when he also stated that he would escalate. We conclude that Mr Chedin’s conclusion on the breakdown of trust and confidence was in those circumstances, a perverse one. Further, it was perverse in circumstances where Mr Chedin had found that the claimant’s conduct amounted to serious not gross misconduct.462.15 Finally, the mistake by Mr Chedin in relation to the number of allegations against the claimant being four not three, and that the claimant was on the PM Desk for Mr Assaf’s visit, were, on the basis of our findings of fact and above conclusions, in Mr Chedin’s mind when he took the decision to dismiss. Those matters also took his decision to dismiss outside of The Range.[463]As for the appeal, whilst we accept that this amounted to a thorough review of the decision, it did not amount to a complete re-hearing. In any event, in all the circumstances as set out above and as summarised below, we conclude that the appeal process did not rectify the unfairness inherent in the original decision to dismiss. Rather, as a result of the failure to consider the allegations in their proper wider context; to interview all of the other members of the PM desk at the time, when issues were fresh in their mind, rather than eight months later, without having contemporaneous documents to hand; to consider the various systemic failings as outlined above particularly in relation to the valuation method; or to consider the claimant’s failure to escalate in the context of Mr McCauley’s failure to do so and as well as Mr Botting’s; the flaws in the disciplinary process were repeated.[464]Whilst we acknowledged that Mr de Lambilly did interview Mr Ward, Mr Lawrence and Ms Chaplin, those interviews took place many months after the gold volatility episode. Further, when Joseph Ward and Mr McCauley were interviewed by Mr de Lambilly, they were not provided with copies of the documents which Mr de Lambilly referred to. It is in the tribunal’s judgment significant that the information provided by Mr Ward to Mr de Lambilly was very different to the contents of the email sent to his personal Gmail address, at the time - see the facts found at para 199 above. Had the interview with him and his colleagues taken place much earlier, as they should have been, if is more probable than not that the answers would have been very different.[465]In relation to the claimant’s argument about the risk valuation method, which was comprehensively changed following the gold volatility episode, Mr de Lambilly concluded that this showed the severity of the claimant’s misconduct, rather than exculpating him. In the tribunal’s judgement that conclusion was outside of The Range.[466]The appeal process did not therefore, on the facts of this case, correct the combined deficiencies of Mr Mostachfi initial ‘investigation’, or the disciplinary process conducted by Mr Chedin. Issue 20 - Did the respondent subject the claimant to the following treatment?a. Suspending him for a failure to escalate risk on 31st March 2020;b. Subjecting him to an investigation by Behnouche Mostachfi;c. Subjecting him to a disciplinary investigation by Laurent Chedin;d. Laurent Chedin (whether in his own right, or as influenced by Mr. Spitz and/or Mr. Assaf and/or Mr. Mostachfi and/or Ms Sqalli) dismissing him on 13th July 2020;e. Tony Botting commenting to Laurent Chedin when interviewed on 14th May 2020 that: “I worked in Asia for 5.5. years, so I’m used to working with Asian people. The cultural aspect is something you need to be aware of in terms of loss of face. They can sometimes be reluctant to agree to something that has gone on.”;f. Behnouche Mostachfi discounting the Claimant to implement the EFP reduction plan on account of “his way of communicating”;g. Rejecting the Claimant’s appeal on 12 May 2021.[467]The tribunal concludes, on the basis of the above findings of fact, that all of the above treatment did happen, save that Mr Chedin was not influenced by Messrs Spitz, Assaf of Mostachfi, or by Ms Sqalli. Issue 21 - Did any such treatment of the Claimant (who is of Chinese nationality) amount to less favourable treatment when compared with the treatment of:-a. Louis McCauley (who is white and Irish); and/orb. A hypothetical comparator, whose characteristics are drawn from the treatment of(a) Louis McCauley and/or(b) Tony Botting.[468]The tribunal’s conclusions in relation to Mr McCauley are as follows. First, when working from home began, Mr Botting made clear to the PM Desk employees during a conference call, that the claimant was in charge of the desk. We have dealt elsewhere with the question as to whether or not the claimant was formally the Head of Desk. Regardless of the answer to that question however, the claimant was the person in charge of the PM Desk. It is true that Mr McCauley did not escalate the EFP dislocation when he was in the office between 23 and 25 March, nor when he was working from home, with access to his phone and email, on 26 and 27 March. His first communication as to a potential issue with the EFP was on 29 March. The issue was subsequently escalated in person to Mr Botting on 30 March 2020. All of those are in the Tribunal’s judgment, material differences between the claimant and Louis McCauley. The tribunal concludes that the claimant was not therefore treated less favourably when compared with the treatment of Mr McCauley.[469]As for the question of a hypothetical comparator, we have not found it necessary to determine that issue because we have been able to make clear findings in relation to the reason for the claimant’s dismissal and the reason for the decision to reject the claimant’s appeal.[470]Further, in relation to Mr Botting, we refer to our conclusions above in relation to the unfair dismissal claim. We conclude that the reason Mr Chedin dismissed the claimant, not Mr Botting, was because of his narrow focus on the individual failings of the claimant, instead of considering the matter in its proper context. Further, at no stage was Mr Chedin asked to investigate Mr Botting. That did not excuse him from failing to ask relevant questions of Mr Botting during the disciplinary process. It does however in the Tribunal’s judgment, mean that Mr Botting’s and Mr McCauley’s circumstances and those of the claimant were different, and the construction of a hypothetical comparator by reference to their characteristics is not appropriate. Issue 22 - are Louis McCauley and Tony Botting appropriate comparators and are their characteristics the appropriate characteristics to attribute to a hypothetical comparator?[471]We refer to the conclusions above in relation to Mr McCauley and Mr Botting. We do not consider it necessary to consider this issue in any further detail for those reasons, and because of our clear findings as to the reason for the treatment. Issue 23 – was any less favourable treatment because of the Claimant’s race, such that he was directly discriminated against contrary to s.13 and 39 EQuA 2010?[472]Suspension: the tribunal concludes that the reason for the claimant’s suspension was that he was seen as the head of the desk, and had failed to escalate. Further, there was clearly some confusion initially, which continued for some time thereafter, as to whether or not it was the claimant who was on the desk on 25 March 2020, when Walid Assaf visited it. Yet further, there were questions initially as to whether or not the claimant had hidden the loss deliberately, and/or was involved in rogue trading. Whilst ultimately there were no such findings, and nor indeed would there have been any basis for any such findings, it is clear from the discussions that took place on and around 30 March 2020 that there were such suspicions at the time. None of the findings of fact above in relation to the discussions between Mr Spitz and Ms David, nor any of the discussions between Mr Spitz and others, including Mr Mostachfi, suggest that the claimant’s race was in any way linked to the decision to suspend him.[473]Investigation: whilst, as noted above, the involvement of Mr Mostachfi in the investigation was indeed unfair, and Mr Mostachfi should have recused himself, his appointment to conduct that investigation had nothing to do with the claimant’s race.[474]Disciplinary hearing: again, we are satisfied that the subjection of the claimant to a disciplinary process conducted by Mr Chedin had nothing to do with his race. Mr Chedin considered that the issue was simple, as noted above, and had a narrow focus in his investigation. The tribunal is satisfied that his narrow focus had nothing to do with the claimant’s race. On the contrary, it had everything to do with his failure to escalate an issue which, in Mr Chedin’s view, should have been escalated.[475]Influence by Spitz or others and dismissing him: we have concluded that Mr Chedin was not influenced by Mr Spitz, either directly or indirectly, via Ms Sqalli, nor by Mr Assaf or Mr Mostachfi. Our conclusion is the same, in relation to Mr Chedin’s decision to dismiss, as it is in relation to the disciplinary hearing/process itself i.e. that it had nothing to do with the claimant’s race. Mr Chedin did consider whether or not the claimant’s cultural background provided any mitigation for his failure to escalate. The tribunal considers that there is an important distinction to be drawn between negative stereotyping of an individual, based on their race; and careful consideration of potential cultural differences, as potential mitigation. The tribunal is satisfied that Mr Chedin’s deliberations were firmly in the latter camp, not the former. Further, the tribunal notes that Mr Chedin properly conceded, during cross examination, that his choice of words was unfortunate, when he referred to ‘Asian culture’, which he acknowledged is not the same as Chinese culture, during that call. Mr Chedin’s willingness to do so further persuades the tribunal that he was not influenced by the claimant’s race when he came to his decision.[476]Tony Botting’s comment on 14 May 2020: taking the record of what was said as a whole, as quoted above, during Mr Botting’s interview with Mr Chedin, the tribunal concludes that Mr Botting’s remark amounted to negative stereotyping. The tribunal has had the benefit of hearing evidence from Mr Chedin in relation to his own consideration of that issue, when questioned about his conversation with Ms Sqalli. The tribunal has not had the benefit of hearing evidence from Mr Botting. We consider that a prima facie case has been established, and the respondent has not provided sufficient evidence to convince the tribunal that the negative stereotyping did not occur on racial grounds. The tribunal is satisfied that a white Caucasian employee would not have been subjected to the same negative stereotyping. The tribunal further notes that Mr de Lambilly concluded that the comment was inappropriate and that Mr Botting would have been subjected to training, had he remained with the business. This allegation is upheld.[477]Mr Mostachfi discounting the claimant to implement the EFP reduction plan: we refer to the findings of fact above. The claimant’s way of communicating was mentioned by Mr Mostachfi during that call. However, it appears from the rest of that call that the reason for the claimant not being asked to assist was because he was being sent home because he did not escalate the issue. It is also apparent to the tribunal, from all the other conversations that took place on 30 March, that the reason for the claimant being suspended, was, as noted above, because he was suspected of deliberately hiding the loss and/or of rogue trading. We are satisfied therefore, taking into account the whole of the evidence, that the claimant’s way of communicating, (even if such a comment was linked directly rather than indirectly with his race), was not the reason why the claimant was not asked to help with the EFP reduction plan.[478]Appeal: the tribunal is satisfied on the basis of the findings of fact above that Mr de Lambilly’s decision in relation to the appeal was because he took the view, like Mr Chedin, that the claimant did not escalate the EFP dislocation, between 23 and 30 March 2020, whereas Mr McCauley did. That had nothing whatsoever to do with the claimant’s race. Issue 24 – Protected acts[479]It is admitted that the following are protected acts:479.1 The Claimant’s appeal letter dated 20 July 2020, in which the Claimant alleged race discrimination arising out of the differential treatment between him and Louis McCauley;479.2 The Claimant’s Equality Act questions to the Respondent dated 27th July 2020 seeking information on differential treatment between the Claimant and(a) Louis McCauley and/or(b) Tony Botting. Issue 25 – was the Claimant subjected to the following detriments because of those protected acts:- a. The Respondent failing to provide any response to his Equality Act 2010 questions until 22nd October 2020;[480]The Tribunal adopts the same reasoning as in relation to the alleged protected disclosure detriment above. The tribunal finds the claimant’s arguments in relation to this particular point somewhat circular. In any event, the tribunal is satisfied that the reasons for failing to provide any response to the Equality Act questionnaire questions until 22 October 2020 had nothing whatsoever to do with the nature of those questions. b. On 22nd October 2020, the Respondent passing responsibility for answering the Equality Act 2010 questions to Mr de Lambilly as part of the appeal investigation;[481]Again, the Tribunal adopts the same reasoning as in relation to the alleged protected disclosure detriment above. In any event, the tribunal is satisfied that the reasons for passing responsibility for answering the questions to Mr de Lambilly had nothing whatsoever to do with the protected acts. c. At the appeal hearing, Eric de Lambilly saying that he was not aware of the Claimant’s EqA questions;[482]Again, the Tribunal adopts the same reasoning as in relation to the alleged protected disclosure detriment above. We conclude that Mr de Lambilly was not aware of the claimant’s Equality Act 2010 questionnaire questions because he was, understandably, not completely on top of his brief at that stage. That was not surprising, given the volume of evidence he had been provided with. It had nothing to do with the claimant having done protected acts.[483]In relation to a to c above, the Tribunal’s conclusions are further reinforced by the fact that the claimant was not able to say, when asked in cross examination, what the connection was between the protected acts, and these alleged detriments. d. Mr de Lambilly failing to engage with any of the Claimant’s race discrimination concerns during the appeal hearing;[484]The tribunal concludes that this claim should not succeed because Mr de Lambilly did engage with the claimant’s allegations of discrimination, and provided reasoned answers to them. The tribunal itself has concluded that save for the comment by Mr Botting, which Mr de Lambilly himself considered was inappropriate, the direct discrimination claims do not succeed. e. The Respondent failing to provide ‘reasoned’ answers to his Equality Act 2010 questions until 20th May 2021.[485]We refer to our findings of fact above. The questions were answered. As noted above, Mr de Lambilly did not perhaps do as much investigation as in hindsight he could have done, in answering some of those questions. The tribunal is satisfied however that that had nothing to do with the protected acts themselves. Overall, Mr de Lambilly did undertake a comprehensive and extensive investigation. Remedy Issues Issue 26 - In the event that any of the Claimant’s claims succeed, would the Claimant have been dismissed in any event due to his performance and/or conduct?[486]The Tribunal concludes that had a fair process been adopted, and had the disciplinary policy been correctly applied in relation to the findings of serious misconduct, the claimant would have continued on the PM desk either as Team Leader, under an improvement plan, or as a trader, and/or been redeployed to another desk as a trader, and placed on a final written warning for 18 months. The tribunal is further satisfied that had that occurred, the claimant would not have committed further acts of misconduct during that 18 month period and the warning would have lapsed without further incident. Issue 27 - Should any basic or compensatory award to the Claimant be reduced on account of the Claimant’s conduct, and if so, by how much?[487]The Tribunal concludes that because the claimant failed to escalate the issue between 23 and 30 March 2020, he did contribute to his dismissal, and any compensation payable for unfair dismissal should be reduced by one third as a result (i.e. 33.33%). Issue 28 - In the event that the Tribunal finds that any or all of the Claimant’s protected disclosures were not made in good faith (see Issue 9), would it be just and equitable to reduce any award to the Claimant, and if so by how much (not exceeding 25%)?[488]Since the protected disclosure claims have not been upheld, it is not necessary to reach any conclusion on this issue.