A trader who lost his job at JP Morgan Chase & Co following allegations of market manipulation was unfairly dismissed because the firm ‘radically altered’ its approach to an issue that arose three years before his dismissal, an employment tribunal has found.
It ruled that Mr B Jones, who was dismissed in 2019 following allegations of gross misconduct, did not engage in market “spoofing” and that his conduct should not have caused or contributed to his dismissal.
Jones began working at investment banking division JP Morgan Securities as an intern in 2010 and in 2014 he began trading alongside two more senior employees. By 2017 he was a vice president supervising more junior staff.
In January 2016 Jones entered and deleted in quick succession two sell orders. The company’s surveillance systems immediately identified this as potential market abuse.
Jones was interviewed by managers about the circumstances surrounding the orders and it was determined that no misconduct had taken place and no further action would be taken.
Unfair dismissal cases
However, to show that it was taking a hard line on allegations of market manipulation following the precious metals scandal JP Morgan Chase & Co was involved in, the company later introduced a new enhanced standard around how it would deal with trading activity that was potentially consistent with spoofing.
In 2019 it commenced a market conduct review. The review found that Jones’ explanations for the events of January 2016 were inadequate and he would undergo a disciplinary process.
In December 2019 Jones was informed that the investigation would be reopened and he was suspended.
He was invited to a disciplinary hearing in relation to the 2016 sell orders. The investigating and disciplining officer told a senior employee responsible for compliance issues that the claimant’s actions “would be treated differently today”.
During the meeting, Jones said that almost four years had passed and he could not recollect the circumstances surrounding the sell orders. He told the investigating parties that the investigation in 2016 was thorough and his innocence had been accepted then.
In January 2020 he was dismissed for gross misconduct. His appeal against the decision was also dismissed.
Jones told the tribunal that respondent changed its approach to the 2016 sell orders because it needed to appease regulators following the precious metals scandal: “heads needed to roll, whether or not they were the right heads,” the judgment says.
It found that Jones’ dismissal was to “further the respondent’s desire to appease its regulators”.
“As such, the dismissal was unfair on the basis that it did not take place for a potentially fair reason,” the judgment says.
It says the claimant and other members of the organisation’s staff simply required further training, and that Jones should not have had to endure a disciplinary process.
JP Morgan Chase & Co has declined to comment on the judgment.