Team moves: Confirmation that lack of integrity and inducing breach of contract can result in regulatory ban
Published 31 January 2014
The Financial Conduct Authority (FCA) has banned Anthony Verrier (a former senior executive at BGC) from performing any function in relation to any regulated activity in the financial services industry, based on Court findings that Mr Verrier participated in an unlawful means conspiracy, including the inducement of brokers at his former employer to breach their contracts of employment by leaving early without lawful justification.
This saga has continued for some time. In late 2008 Mr Verrier left his position as COO of Tullett Prebon PLC, a firm of inter dealer brokers, to join competitor BGC Brokers LP. As soon as he arrived at BGC in January 2009 he put into action a plan to recruit Tullett brokers. He succeeded towards the end of March 2009 in persuading 13 to resign from Tullett, claim they had been constructively dismissed and sign "forward contracts" with BGC, although three later changed their minds and stayed with Tullett.
Tullett brought proceedings against BGC and on 2 April 2009 Tullett obtained interim relief, preventing the broker defendants from taking up employment with BGC. After a trial from 14 October 2009 until 5 February 2010, the High Court rejected the claim of the defendant brokers that they had been constructively dismissed and found that BGC, Mr Verrier and another person had participated in an unlawful means conspiracy, the unlawful means including the inducement of the broker defendants to breach their contracts of employment with Tullett by leaving early without lawful justification. In February 2011 the Court of Appeal upheld the High Court's decision
The High Court found Mr Verrier had orchestrated the "disappearance" of a number of mobile phones and Blackberries. The Judge referred to his "gambit to 'lose' Blackberries whenever he thought they might contain inconvenient material." The High Court also "found that in [Verrier’s] evidence Mr Verrier stuck to the truth where he was able to, but departed from it with equanimity and adroitness where the truth was inconvenient."
The FCA has the power, pursuant to section 56 of FSMA, to prohibit an individual from performing any function in relation to any regulated activity where it appears to the FCA that individual is not a fit and proper person. In March 2012 the FSA (as it then was) published a Decision Notice setting out that it had decided to prohibit Mr Verrier due to concerns over his integrity based on the findings in the Court proceedings. Mr Verrier referred the matter to the Upper Tribunal in April 2012. On 22 January 2014 Mr Verrier withdrew his appeal to the Upper Tribunal, leading to the publication of the FCA's Final Notice on 29 January 2014.
What this means for employers
While the timetable shows the FCA's action will not replace Court proceedings on team moves, it confirms that lack of integrity in a team move can also have serious regulatory consequences. It also confirms the FCA's ability to rely on facts determined by the Court without needing to carry out its own investigation.