Individuals in FX “Kickback” Ban Win Appeal

Three former employees of Bank Julius Baer (BJB) who were handed lifetime bans by the UK’s Financial Conduct Authority earlier late last year, have had the bans overturned on appeal to the UK’s Upper Tribunal. In December 2022, the FCA won a judgement against BJB for allowing the conduct.

Calling the bans on the individuals “irrational”, the Tribunal also criticised the UK regulator for failing to disclose all documents in the case, which involved alleged kickbacks associated with FX trades.

The three, Gustavo Raitzin, former regional head for BJB; Thomas Seiler, former BJB sub-regional (market) head for Russia and Eastern Europe and JBI non-executive director; and Louise Whitestone, former relationship manager on Julius Bank International’s Russian and Eastern European desk, had “demonstrated varying degrees of a lack of competence and capability”, the Tribunal ruled, rather than a lack of integrity, as alleged by the FCA.

Pointing to its successful outcome against the bank, the FCA says in a statement, “There were obvious signs that the arrangements between Julius Baer and the finder were potentially improper and corrupt. These were serious failings so it was clearly in the public interest for us to examine the conduct of the individuals who were most closely involved.

“The Upper Tribunal was critical of many aspects of the conduct of each of the individuals in this case, albeit it has found that such conduct was negligent rather than reckless,” it continues. “As we made clear when we first publicised this case, this was an important case to bring because it concerned serious risks of financial crime. The Tribunal agreed with many of our arguments including that suspicious transactions should have been stopped.”

In spite of criticism from the Tribunal that the FCA has repeatedly apologised for failings without learning from them, the UK regulator says in its statement, “One document of limited significance was not disclosed that should have been as a result of human error. While human error cannot ever be eliminated completely, we take seriously the Tribunal’s recommendations and are reviewing our disclosure processes.”