Spencer's Icap attempts to cool tempers with non-poaching rules

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Peace could be about to break out in the infamously competitive world of money-broking, the highly pressured and highly paid City trading business that has witnessed a string of legal disputes in recent years over staff poaching and unfair dismissals.

Peace could be about to break out in the infamously competitive world of money-broking, the highly pressured and highly paid City trading business that has witnessed a string of legal disputes in recent years over staff poaching and unfair dismissals.

Michael Spencer, the chief executive of Icap, is understood to be seeking legal agreements among rivals to put an end to the damaging spiral of poaching staff that is costing the brokerage firms millions in settlements.

It is thought that Mr Spencer has succeeded in securing at least one such agreement with its New York rival GFI, run by the British-born trader Michael Gooch. Mr Spencer's olive branch is also thought to have been extended to other firms in the money-broking community, including Collins Stewart Tullett.

Collins Stewart, headed by Terry Smith, and Icap have just settled a bruising legal dispute relating to the alleged poaching by Icap of 27 Collins Stewart staff working in Asia, clearly indicating that these two firms have no such agreement in place. A spokesman for Collins Stewart declined to comment.

Money-broking is one of the most aggressive City trading businesses. The firms trade a string of relatively arcane financial instruments and act as a lucrative middleman for other firms of stockbrokers and professional investors.

The business has been rapidly consolidating in recent years around a battle for dominance. As well as buying rival businesses, the money-broking firms have been busy poaching rivals' staff. In addition to its recent case against Icap, Collins Stewart has been involved in another case through a subsidiary, Prebon, which took legal action against the rival BGC Partners, part of Cantor Fitzgerald, one of the other main money-broking operations. BGC has also recruited staff en masse from Icap.

Non-poaching agreements are rare because many broking firms involved do not wish to accept the status quo implied by the undertakings. The businesses are all run by ambitious and motivated management, keen to establish dominance over rivals.

The only non-poaching or non-compete agreements that do exist are put in place for a few months after a legal case is settled or after a takeover is completed.

Questions also remain about whether non-poaching agreements are enforceable either in Europe or the US or whether they are really little more than gentlemen's agreements.

Some people involved in the industry say the rate of poaching or "churn" has fallen dramatically in recent years. But any outbreak of peace in the money-broking community would come as a significant departure for a business famous for its aggressive behaviour.

A spokesman for Mr Spencer said the company did not want to comment about non-poaching agreements. He said this was because Icap did not want to encourage more negative media coverage about the industry after lurid tales of late-night drinking and offensive office antics.

Calls to GFI's Global Press Centre in London were not returned yesterday.

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