HSBC Stares Into The Eye of the Tiger And Blinks

September 18, 2015

Some folks turn the other cheek and simply move on. Other folks fight back, counter-punch, and seek to teach those who jerk them around a lesson. Not that it's any big surprise to readers of the Blog but I tend to fall in that second camp. No . . . every slight doesn't merit retribution and, sure, sometimes it does pay to walk away and get over it. On the other hand, after three decades of lawyering on Wall Street, I am still amazed at how much crap many registered representatives put up with and how few men and women are willing to lace up the gloves and step into the ring.

It's the eye of the tiger. It's the thrill of the fight. Those lyrics from "Eye of the Tiger" by the band Survivor pretty much sum up the point of today's blogIn the left corner, we have the odds-on favorite HSBC. In the right corner, we have a former HSBC employee, who claims to have been wrongfully fired and defamed. The bell has rung and the fighters come out to the center of the ring.

Case In Point

In a Financial Industry Regulatory Authority ("FINRA") Arbitration Statement of Claim filed in September 2013, associated person Claimant Quillacq alleged causes of action including defamation, slander, liber, tortious interference with business relationships, and breach of contract in connection with his employment by Respondent HSBC Securities.  Claimant sought payment of his bonus, wages, severance, and unrestricted shares units. In addition to punitive damages, attorneys' fees, and costs, Claimant sought an expungement of his  Uniform Termination Notice for Securities Industry Registration ("Form U5"). In the Matter of the FINRA Arbitration Between Gontran De Quillacq, Claimant, vs. HSBC Securities (USA) Inc., Respondent (FINRA Arbitration 13-02861, September 8, 2015).

Respondent HSBC generally denied the allegations and asserted various affirmative defenses.


The FINRA Arbitration Panel found Respondent HSBC liable and ordered it to pay to Claimant:

  • $79,235.65 in compensatory damages plus 9% annual interest from October 2, 2012 until the award is paid;
  • $20,000 in attorneys' fees; and
  • $3,510.22 in costs

Expungement Recommendation

The Panel recommended the expungement of the Termination Explanation from Section 3 of Claimant's Form U5 as filed on November 1, 2012. The Panel recommended the deletion of the explanation as initially filed and its replacement with:

Gontran De Quillacq was unjustly terminated based on his supervisor's failure to supervise, inadequate trading system, and an error of another employee, which was not attributable to Gontran De Quillacq.

Bill Singer's Comment 

No . . . I can't offer you more information than the above snippets because the FINRA Arbitration Decision has, unfortunately, kept it to the bare basics, if that.  That's unfortunate because in these employment disputes, it's a fairly rare occurrence for the former employee to win and it would have been helpful for other similarly situated folks to learn what was at stake here and why De Quillacq prevailed. Who was the supervisor and what was the supervisory failure? Dunno. What persuaded the arbitrators to deem UBS's trading system as inadequate? Dunno. What was the other employee's error? Dunno. What went into calculating the roughly $79,000 in compensatory damages? Dunno.

Notwithstanding the lack of content and context in the Decision, I applaud Claimant De Quillacq for not only demanding a match against his former employer but also for landing a knock-out blow. In addition to winning a purse in excess of $100,000, Claimant now has it in writing from a panel of three independent arbitrators that he was:
  1. unjustly terminated;
  2. that his employer had an inadequate trading system; and
  3. he was wrongly blamed for someone else's error.
Why do those three points matter? Mainly because whenever someone in De Quillacq's shoes interviews for a job, a potential employer might learn about his "discharge." Upon making inquiries of the former employer, that firm might inform any potential employer that the subject employee was fired because of a trading error and that given the superlative nature of the firm's world-class trading system, that the only explanation for the screw-up was the axed employee's incompetency. If -- and that's a big "if" -- a prospective employer even goes so far as to confront such a job candidate with the former employer's explanation, the candidate's response will often be taken with a grain of salt. 

What De Quillacq accomplished was to regain the "narrative" of his termination from HSBC. Three independent FINRA arbitrators clearly found him to have been unjustly terminated based upon circumstances that cast a shadow upon his former employer. Such a victory may well save a reputation and salvage a career. In any event, here's a little music to end this article: