If you work for an investment bank, you may feel that a grandiose job description is your due – particularly now that pay is being restricted by the likes of the European Union. However, bankers are being warned against seeking overly important job descriptions. If you’re a banker, it’s far better for your job to be described in menial terms, said one lawyer. That way, you can’t be held accountable for too much.
“Before you accept a new job in banking, it’s a very good idea to look hard at your job description,” said Charles Ferguson, founder of London-based Ferguson Solicitors, which specialises in representing traders in employment law cases. Limited or menial job descriptions are best. “If you’re running a trading floor and your job description simply says you’re the cleaner for the gentleman’s toilets, the financial services regulator will be forced to prove you’re really responsible for the entire floor before including you in an investigation,” Ferguson advised.
Other lawyers are dispensing similar advice. One senior banker who recently left Royal Bank of Scotland (RBS), said a group of lawyers visited the bank’s offices to recommend that jobs should as closely defined as possible to avoid people being caught up in regulatory investigations. The UK Financial Services Authority (FSA) – recently reborn as the Financial Conduct Authority (FCA), has substantially increased the number of investigations it carries out into individuals in the past few years. “It’s a huge risk,” said the ex-RBS banker. “All it takes is for them to start investigating you and your career is pretty much over – or you have to spend fortunes on lawyers to clear your name.”
Harvey Knight, a partner at law firm Withers Worldwide and a former leading authorisations and approvals lawyer at the FSA, said job descriptions are one of the things the FCA looks at in so-called ‘enforcement cases.’ “They will dig out the job descriptions and look at structure charts and reporting lines and work out who was responsible for what,” Knight said.
In February 2013, John Hourican, previously chief executive of the investment banking arm of RBS, left the bank after it was fined £87.5m for manipulating LIBOR. Hourican wasn’t directly involved in LIBOR setting and resigned voluntarily rather than being forced out by the FSA. Nevertheless, Hourican forewent around £4m in bonuses to help pay RBS’s LIBOR fines.
Ferguson said a far higher proportion of his work nowadays involves representing traders who are being investigated for misconduct by the FCA: “We’ve had four or five of these cases recently, which is a lot for a small firm like ours.” One headhunter, who declined to be named, estimated that there are as many as 100 traders sitting out of the market while the FCA investigates them for LIBOR setting and other misdemeanours. “These investigations can go on for years and in the meantime, people usually can’t work. It’s outrageous really,” he said.
The FCA declined to comment on the advisability of restricted or so-called ‘toilet cleaner job descriptions.’ However, a spokesman said enforcement investigations take a long time because they are “very complicated exercises.”
Ferguson said there have been cases in the past where the FSA has spent three years investigating an individual for insider trading, before dropping the matter without charges.
If you’re a banker, limited ‘toilet cleaner job descriptions’ are one method of restricting the regulator’s ability to accuse you of a broad range of misdemeanours. However, they are unlikely to be effective at senior levels. When senior bankers are being hired into significant influence functions in the City of London, the regulator will typically summon them for an interview to establish their suitability for role. During this interview, Knight said bankers are typically pushed to responsibility for broader aspects of the job. “If the job description says you’re responsible for a,b and c, the regulator will push you to admit responsibility for e,f, and g,” he said. “That way, they can bring enforcement proceedings against you for a broader range of issues.”