A Purchase resident, who was formerly head of Barclays Bank PLC's currency trading desk in Manhattan, filed a lawsuit against XL Insurance Co. in federal court in White Plains on Dec. 18. In his filing, he contends that Barclays declined to pay his legal fees after his arrest on federal collusive trading charges, even though their insurance policy was written saying that they would cover such costs.
The lawsuit chronicles how the plaintiff was originally hired by Barclays to manage the trading of U.S. dollars and Euros in 2010. By February of 2013, he was let go from that job.
By early 2018, the Federal Reserve's Board of Governors of had accused him of breaching his fiduciary duties. They detailed how they believed that he had manipulated competitor currency benchmarks and instructed his colleagues to do the same. They said he and others under his direction shared the confidential information with competitors via electronic chat rooms.
Barclays paid the plaintiff's expenses up until his criminal indictment earlier this year. His attorney was directed to contact the bank's insurer, XL Insurance, about payments of legal fees after that. When he reached out to them, they informed him the policy didn't allow them to pay his legal fees anymore.
When asked for a copy of the policy, the plaintiff was provided with excerpts showing that he didn't qualify for coverage of his legal fees. When pressed further to review the policy in its entirety, the plaintiff's attorney was invited to review it at Barclays office but was reportedly told that he couldn't take notes nor reproduce it. He contends that the policy that he reviewed allows for coverage of his client's bills.
The plaintiff argues that he's spent as much as $1.1 million on legal bills so far and that he expects to spend $4 million more by the time the case wraps up.
It's unclear when the next hearing in the matter will take place.
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