The banker accused Morgan Stanley of fabricating its position to mislead European regulators about relocating key employees from London to Frankfurt after Brexit, according to Finance Times.
The banker, hired as a managing director in Morgan Stanley’s Frankfurt office in April 2021 with a salary of 375,000 euros plus bonuses, held the official title of “head of credit trading.” He testified at the hearing that his supervisor instructed from the start that this title should not be used, claiming it existed only on paper to satisfy regulator requirements.
Despite his leadership role just below the general manager, the former employee did not participate in the department’s management and mainly handled extending non-performing loans in EU countries. He also believes his later dismissal was for alleged violations, arguing that he did not pose a significant risk to the bank, and that the decision should be reversed.
In the wake of Britain’s exit from the EU, the European Central Bank pressed for international banks to operate in Europe with local staff rather than from London. Regulators reject so-called dummy structures, where European divisions are led by bankers based in London.
The court rejected Morgan Stanley’s argument that the banker was a financially responsible executive in Frankfurt and upheld his appeal against dismissal. The bank has signaled its intention to appeal the ruling.
Earlier, a Canadian court ruled in favor of an Air Canada passenger who had been misled by artificial intelligence.
Additionally, a separate legal matter in the United States has seen an assertion that a former political figure committed fraud, which has been the subject of ongoing legal debate.