Brokers back in High Court
INTER-dealer broker BGC Partners yesterday said rival Tullett Prebon’s ploy to obtain a lengthy injunction against the recruitment of its staff was an unprecedented attempt to block competition in the industry, as the two resumed their bitter battle in the High Court.
Tullett is seeking an injunction to prevent BGC from negotiating any forward contracts with its brokers for a period of at least 18 months pending the result of the case, which was adjourned for the past three weeks after a defence barrister was taken ill.
But Andrew Hochhauser QC, presenting his opening statements on behalf of the defendant BGC yesterday, said the request would constitute “a total block on competition unprecedented in English law” and added that the purpose of such injunctions should not be to “punish” a defendant.
Responding to Tullett’s claims that BGC orchestrated a “carefully constructed raid” on its staff in a bid to destabilise its business, Hochhauser said the high-octane world of inter-dealer broking was “tribal in nature” and “not for the faint-hearted”. He added that the use of forward contracts, lucrative “golden hello” sign-on bonuses and indemnities to protect staff from legal action on the part of former employers were universal mechanisms applied throughout the industry.
Tullett has claimed BGC president Shaun Lynn offered over £40m to its key broking staff to try and lure them away, after the firm poached Tullett’s former chief operating officer Tony Verrier last year. It said the figure included a £1.1m golden handshake paid to James Bowditch, head of the short term sterling derivatives desk.
But BGC, which argues that just £8.75m has been committed to the new staff over five years, countered yesterday that offering hefty bonuses is standard practice in the sector. Hochhauser pointed judge Justice Jack to documents showing an attempt by Tullett to recruit one of BGC’s star brokers, Carsten Girst, who was offered over £1.6m as a sign-on bonus.
The case continues.