Wealth Manager - the site for professional investment managers

Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

FCA probes investment bank amid analyst legal battle

FCA probes investment bank amid analyst legal battle

The Financial Conduct Authority (FCA) has a launched a probe into Jefferies after one of its former top analysts claimed he was coerced to alter client research. 

According to The Times, Milan Radia, who spent almost 11 years at the US investment bank up to April 2017, claims he was forced to change a report under pressure from a prospective client for the bank. 

An employment tribunal held yesterday also heard that Radia was asked to attend float pitches, which according to him were in breach of market rules. 

In his legal claim Radia, who was managing director of equity research at Jefferies, alleged his former employers had breached rules over the use of equity research to win initial public offerings. 

According to The Times report, Radia went on to claim that equity research analysts at Jefferies had been paid by the bank for 'their specific work on winning IPO and other investment banking transactions'.

He also alleged that senior bankers had asked for 'certain text'; to be included in research reports 'in an attempt to gain favour with decision-makers on pitches for forthcoming IPO transactions'.

Telecity, a London-listed date centre business, and payments and money transfer firm Moneybookers (now known as Skrill), which was looking at a possible float, were identified by Radia's lawyer Sam Neaman as two firms where breaches took place. 

Neaman told the tribunal that Radia had 'succumbed' to pressure from David Weaver, a former senior Jefferies banker, to alter the Telecity report. 

Neaman also told the employment tribunal that the FCA was investigating Jefferies. 

Jefferies chief financial officer Huw Tucker is reported to have told the tribunal that while he was not aware of the nature of Radia's allegations he knew of the FCA investigation. 

'We did have a board meeting with the FCA where they informed us of the investigation,'  Mr Tucker said. He also said the FCA review into Telecity was now closed. 

This is not the first time Radia has taken his former employers to court. 

In his first claim against the bank, he accused the bank of cutting his bonus after he returned to work following treatment for leukaemia eight years ago. The claim was rejected by a tribunal in February. He left Jeffries two months later. 

A spokeswoman for Jefferies told The Times: 'As was the case with Mr Radia’s first tribunal claim which he lost on all points, this claim has no merit and we are confident that we will prevail.'

The FCA declined to comment.

 

 

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
CIO Tapes 2: two warnings and a lot of optimism

CIO Tapes 2: two warnings and a lot of optimism

Our group of leading asset management CIOs see a lot of opportunities – and overseas investors are buying UK too

Play Wealth Manager Retreat 2017: size isn't everything

Wealth Manager Retreat 2017: size isn't everything

We asked our delegates at the Wealth Manager Retreat what they think about the recent wave of consolidation in the industry.

1 Comment Play CIO Tapes - part 3: 'passive funds are anti-capitalist'

CIO Tapes - part 3: 'passive funds are anti-capitalist'

Citywire recently gathered three of the UK's leading fund investment heads to discuss their hopes, fears and the issues that their jobs throw at them daily.

Read More
Your Business: Cover Star Club

Profile: Kleinwort Hambros' boss on how to manage five banks

Profile: Kleinwort Hambros' boss on how to manage five banks

Welding together Kleinwort and Hambros – two of Britain’s most historic banks, founded in 1786 and 1839 respectively – was always going to be a challenge.

Wealth Manager on Twitter