Insults fly as Prebon sues Spencer's Icap for £2m

ICAP, the broking house, is being sued by its rival Prebon Marshall Yamane in a £2m staff-poaching row that continues a series of high-profile legal battles among the City's derivatives and money-broking traders, famous for high pay and high living.

Icap, led by Michael Spencer, yesterday scoffed at Prebon's claims that it had induced three coal derivatives traders to renege on agreements to defect to Prebon and instead stay at Icap.

Mr Spencer said: "I have not yet lost a lawsuit and I am not about to start against those plonkers at Prebon."

Tony Verrier, Prebon's chief executive, said: "We are disappointed the team decided to disregard their signed contracts with Prebon and stay at Icap. Coal is a new market to Prebon in Europe and we agreed to pay a premium to attract this team of three brokers. We are sceptical about Icap's ability to put a more attractive offer than Prebon's on the table and continue to make any money out of this business."

An Icap spokesman said: "It's all a storm in a coal scuttle."

Prebon recently announced the appointment of their new three-strong coal trading team hired from Icap. The announcement was made after Prebon had received signed contracts from each member of the team, it said.

"Since this time," a Prebon statement said, "due to a lucrative offer from Icap, the team has been induced to stay at Icap."

Prebon said it would be issuing proceedings in the High Court against Icap and the three individuals concerned - George Dranganoudis, Dennis Walton, and Alexander Newman - unless Icap pays it £2m in damages.

"They haven't got a prayer of their argument standing up in court," Mr Spencer said. "They will also have great difficulty proving any quantum of damage."

The row has brought typically high-profile legal teams to join battle. Icap is using the famous employment barrister Andrew Hochauser who fought Icap's often bitter legal battles against Cantor Fitzgerald in a staff poaching row after the 11 September terrorist attacks.

Prebon has hired John Farr and Daniel Ornstein from Herbert Smith, the leading City law firm.

The sort of derivatives trading that Icap and Prebon are involved in was always one of the more obscure and least glamorous City pursuits until the likes of Mr Spencer started to take a grip on the market and build large businesses specialising in the area. The huge amounts of money at stake have attracted the world's top traders who demand huge pay packets and a lifestyle to match.

A string of court cases between rival houses has revealed details of high pressure, foul-mouthed workplaces fuelled by long, after work drinking sessions, visits to lap-dancing clubs and drug use.