Russian bank Otkritie seems to be extremely generous to its new hires. In January this year, it recruited a team of five people from Knight Capital and agreed to pay them an impressive $5m (3m) each in signing bonuses.
Somehow, however, it's alleged that the money never reached its intended recipients. Instead of getting $5m each, three people allegedly received $500k, $750k and $1m, and the remainder was allegedly kept by one person: the team leader.
The person accused of embezzling the funds is George Urumov. Urumov was previously a trader in emerging markets fixed income sales at Knight Libertas, an emerging markets trader at HSBC, and a European credit trader at Lehman. A graduate in banking and international finance from Cass, Uromov he has a masters in finance and economics from the LSE and appears to have joined the Lehman trading programme in London straight from university. Otkritie hired him as its global head of fixed income.
Uromov has been suspended and Bloomberg reports that Otkritie is bringing a civil lawsuit against him.
It is quite possible that Uromov is innocent. Even so, the case remains informative.
Firstly, Uromov's career looks like a case history in how to get ahead. His record with the
FSA shows him moving jobs regularly. He was at Lehman for three years, at HSBC for three years, and at Knight Capital for a year and a half, before becoming global head at Otkritie.
Secondly, it clarifies the extent to which smaller - so-called 'Tier 2' players - are still free to pay large signing bonuses. Whilst the FSA has focused on snuffing out big guaranteed bonuses and non-stock related signing payments at larger banks, smaller firms have been relatively unhindered in their ability to lure talent with wads of cash. Otkritie may be more circumspect when it comes to paying millions in cash sign-ons in future.