Bonuses of as much as 84 million euros ($96 million) paid out by Deutsche Bank AG to individual bankers just after the global financial crisis are at the center of a lawsuit filed by a former trader.
Yves Paturel, who was fired amid probes into the rigging of Libor rates, said in London court documents that senior colleagues received generous bonuses for 2008 and 2009, while he had to make do with 4.3 million euros. His colleagues were rewarded with payouts that dwarfed his when accounting for the profit they generated for the company, he said.
Lawmakers and regulators cracked down on banker pay in the wake of the financial crisis, putting an end to many of the awards highlighted in Paturel’s lawsuit. Still, the lawsuit captures a snapshot of compensation in the banking world before the industry became mired in a never ending cycle of scandals.
“Those bonuses are a once in a lifetime scenario,” said Jason Kennedy, chief executive officer of London-based recruitment firm Kennedy Group. “It was a place and time that will never reoccur in our generation.”
Paturel was fired in April when Frankfurt-based Deutsche Bank paid a record $2.5 billion in fines to settle U.S. and U.K. investigations into its role in rigging the London interbank offered rate. His breach of contract lawsuit, initially filed with another trader who has dropped the claim, was seeking as much as 5 million pounds ($8 million) in bonus payments.
A wave of litigation followed the regulatory crackdown on bonuses, with mixed results. According to the filings, Paturel has hired Andrew Hochhauser, the trial lawyer who helped 104 Dresdner Kleinwort bankers win about 50 million euros from Commerzbank AG in the U.K.’s biggest ever bonus lawsuit.
Paturel says former Deutsche Bank trader Christian Bittar, who is also caught-up in the Libor probe, received bonuses of 84 million euros for 2008 and 63 million euros for 2009. He also states Carl Maine, who he says held the same director role as him, was given a bonus of 38 million euros for 2008.
Deutsche Bank said in its defense documents that Maine and Bittar didn’t receive any discretionary compensation in 2008 and 2009. Instead, their pay was based on separate metrics that were subject to their “contractual arrangements,” the bank said. Those kinds of payouts, which were based on a percentage of profit, were ceased after the 2009 performance year, the bank said in a statement.
“Paturel was dismissed as a result of an order made by the New York Department of Financial Services with respect to interbank offered rates,” Deutsche Bank said in an e-mail Thursday. “His claim for further compensation, which is based on information that is inaccurate and unverified, is without merit and we will contest it.”
Paturel’s lawyer didn’t immediately respond to a phone call and e-mail seeking comment.
According to Paturel’s suit, the head of global finance and forward foreign exchange awarded Paturel 1.3 million euros for 2008, about 1 percent of the 133 million pounds he’d made in profit that year. The executive said all members of the money markets derivatives desk had been treated similarly and Paturel was “lucky” not to be a managing director because the cut would be bigger.
Bittar was a managing director and allegedly received 11 percent of the profit he made, Paturel said in the lawsuit.
A lawyer for Bittar didn’t immediately respond to an e-mail seeking comment. No contact details were found for Maine in U.K. phone directories and he didn’t immediately respond to an e-mail via LinkedIn.
The case is Black v. DB Group Services (UK) Limited. High Court of Justice Queen’s Bench Division, HQ15X00205.
–With assistance from Kit Chellel in London.