A former trader is taking Nomura Securities, the Japanese bank, to court in the US seeking more than $500m (£344m) for alleged breach of contract.
Nomura Securities declined to comment on the action yesterday, but banking sources have indicated that the claim was being made by Keesup Choe, a 40-year-old swaps trader who was made redundant by the bank in December 1999.
However, Nomura Securities did confirm that Mr Choe was suing the bank's British arm for breach of contract and claiming £10m in the UK courts.
In its most basic form, swaps trading involves exchanging a fixed-interest bond with a floating-rate loan. More esoteric swaps trades can generate millions for the traders involved, and also for their employers.
Mr Choe started work for Nomura's London office in 1993. It is believed that he had a contract only with the UK division of the Tokyo-based bank and he was on a base salary of £120,000 a year.
The £10m claim lodged in London is said to relate to bonuses of £12.6m claimed on profits of £51.5m which he made for Nomura between 1996 and 1999. While Mr Choe left the bank along with the rest of his swaps trading team, none of his former colleagues are involved in the action.
This is not the first time that Nomura has been involved in a legal battle over alleged unpaid bonuses.
In 1997, a judge ordered Nomura to pay £1.35m to Steven Clark, a London-based equities trader who was dismissed for allegedly criticising management, after it declined to pay a bonus on £6.47m he had earned for the bank. In a previous year, it had paid him a £2.5m bonus after he made £14m.
Nomura argued that the bonus was discretionary, but the court said that an employee could not be treated "irrationally and perversely" in the exercise of discretion, and ruled that Mr Clark had been unfairly dismissed.
Nomura did not appeal the judge's decision.Reuse content