The affair is a fresh embarrassment for Imro, the regulator for fund managers that is already under parliamentary scrutiny and riven by infighting.
Simon Thurlow, 30, claims he came close to suicide after being declared unfit to work in finance by the brokers' regulator Fimbra, on the basis of information supplied by Imro.
Mr Thurlow, who is seeking six-figure damages, said: "It's like an Orwellian nightmare when these regulators go for you. Fighting them is horrendous because you always run out of money before they do." He was echoing the feelings of many who feel they have suffered at the hands of the City's regulatory system.
Imro enjoys statutory protection from litigation except in certain highly unusual cases. But Mr Thurlow is confident that his is such a case.
His claim will come at an embarrassing time for Imro, which came under fire last month when its chief executive Phillip Thorpe said he had been muzzled by his chairman, Charles Nunneley, before giving evidence to MPs on the state of City regulation - a claim Mr Nunneley denied.
Mr Thurlow headed a junk-bond investment business at A&R Equity, an Imro- regulated firm now owned by Arbuthnot Latham. Last year, after a series of investigations, A&R admitted to breaches of the rules, including having inadequate compliance systems, rather than face further investigations and a formal tribunal.
But Mr Thorpe subsequently apologised to A&R that the investigation had not in certain respects been "conducted according to our normal high stand- ards". A&R therefore launched an appeal against the charges, for which it had been fined pounds 15,000. One charge has already been deleted, and a further hearing is due shortly.
But in the meantime, the junk bond department was closed, Mr Thurlow lost his job and moved to another firm, Hoodless Brennan, at a much reduced salary.
Then, Imro passed details of the A&R charges to Hoodless's regulator Fimbra, but not the details of the apology. The "black data" was enough to deny Mr Thurlow Fimbra membership and any chance of earning a living in financial services, even though Imro's own chief executive had already criticised the conduct of the original investigation.
"It was desperate. I lost my job again because I couldn't join Fimbra, I was on Mogadon, and my doctor can testify that I was extremely depressed," Mr Thurlow said.
Eventually, at a Fimbra appeal hearing in February, the case against him was thrown out after the existence of Mr Thorpe's letter was dramatically revealed by Mr Thurlow's counsel.Reuse content