A band of key employees at money brokers Tullett Prebon bought, and later disposed of, more than a dozen BlackBerrys in order to marshal a £40m mass defection to rival firm BGC Partners, a court has heard. At the heart of the alleged conspiracy and cover up was Tony Verrier, 45, one of London's most experienced inter-dealer brokers and, until his departure last autumn, Tullett's chief operating officer.
Lawyers for Tullett, a FTSE-250 firm run by combative chief executive Terry Smith, have accused Verrier of seeking to turn trading desk heads into "recruiting sergeants" for defection plans hatched with BGC. Verrier had been Smith's righthand man since the two joined forces through the 2004 merger of Collins Stewart Tullett and Prebon Yamane.
Court papers show Tullett claiming BGC had committed "well over £40m of expenditure" to the alleged staff poaching raid, which saw 13 traders switch employer. "Many millions" were paid to Verrier by way of a sign-on sum, Daniel Oudkerk QC, acting for Tullett, told the high court in London. Counsel for Verrier stood up to remind the court that both sides had agreed not to mention the exact figure in open court.
Faced with a string of requests to surrender mobile devices, Verrier claimed to have "lost" seven BlackBerrys and had been unable to help unlock an eighth, which had inexplicably become password protected. Verrier's secretary at Tullett also lost two BlackBerrys, while heads of trading desks also said their mobiles had been lost or disposed of for innocent reasons. "The pattern of disposals of evidence in this case is compelling," Oudkerk told the court. He suggested around 45,000 messages had been lost.
Some of the text message evidence has been salvaged from those Tullett employees who were persuaded not to defect. One read: "OK mate. TV [assumed by Tullett to be Tony Verrier] will call you later & so will i. Maybe all is not lost. Upfront dosh could be a tad more. Working hard to set us all up."
Quiet London restaurants were used for meetings to discuss defections. Papers show some witnesses claim there was not always universal agreement. One Tullett broker allegedly told Verrier: "Your company's shit. Why should we do this?" Verrier later told the broker if he tried to row back on an agreement to defect he "would nail [the broker] to the fucking wall".
As well as claiming a co-ordinated defection conspiracy, Tullett alleges Verrier, BGC and the defectors agreed to lodge "sham constructive dismissal claims" to wriggle out of notice and non-compete periods in their contracts with Tullett.
In Verrier's case, he claims he was freed from his contractual obligations to Tullett after an article appeared last summer in a Sunday newspaper claiming he was in Langkawi, Malaysia, on holiday with a mistress. The report had appeared days after Verrier told Smith he intended to go and work for BGC and he had been off work sick when it appeared. He blamed the article for ruining his marriage and believes the story was planted by Tullett.
Other Tullett defectors later claimed constructive dismissal related to the treatment of a suspended trader, James Hall, an alleged senior figure in the conspiracy.
An interim ruling in April, handed down prior to the current trial, found: "The defendant's conduct ... as it is set out by Tullett, shows a cynical disregard for the law and for employees' duties." The case is just the latest in a string of regular legal disputes over "tapping-up" allegations between inter-dealer broker firms. Highly specialised and highly paid, the most experienced brokers in these opaque markets are much sought after.
Tullett has made similar allegations against BGC in America over the defection of 52 brokers and is seeking damages running into hundreds of millions of dollars.
In 2002 Cantor Fitzgerald, which later spun out its BGC operation, fought a bitter high court battle in London over allegations Icap had sought to ruin the business by poaching key staff in the wake of terrorist strikes on the World Trade Centre which had killed more than 600 of Cantor's staff. The case proved a window on to a world of huge pay deals, lap-dancing clubs, foul language and workplace bullying.
At the time Lee Amaitis, Cantor's chief executive in London, sought to claim the moral high ground. "I had just had 658 members of staff murdered and he is talking about 'putting one up our bottom'. You think this is supposed to be a joke? It's disgusting. It is morally disgusting."
He was referring to a series of emails in which Icap boss Michael Spencer had revealed "I would love to plan a heist ... Oh, I would love to put one up their bottom and this is the time I have been waiting for for just a few years!!" The case was settled with both sides claiming victory.
Eight years earlier Cantor paid an estimated £1.1m to Icap to settle another claim over poaching allegations relating to 20 staff.
The latest trial, between Tullett and BGC, opened today. BGC denies the allegations.