News and Publications

Non-financial misconduct within financial services - no room for unwanted "love and affection" in a firm’s culture

Posted: 12/08/2022


Jan Skarbek, one of the most high-profile dealmakers at Citigroup, who had worked for Citi for decades, is currently being investigated after allegedly telling a female analyst that he needed “love and affection” while on a work trip in Barcelona.

He was suspended and an investigation into his conduct was commenced. A spokesman for Citigroup previously stated that they have a "zero tolerance for inappropriate conduct".

Skarbek has now decided to resign from his role, with his friends stating that he made the decision to quit after the internal investigation into his conduct became public. The investigation is understood to be ongoing.

Depending on the outcome of the investigation, and assuming that the allegation is found to be true and a negative finding is made in relation to his fitness and propriety, Skarbek could find himself prohibited from taking future senior roles in the City. In light of increasing complaints and scrutiny about inappropriate behaviour in this male dominated industry, financial institutions across Europe are taking complaints more seriously and dealing with them accordingly. Specifically, after last July’s discussion paper on diversity and inclusion in the financial sector, the Financial Conduct Authority (FCA) is looking closely at non-financial misconduct, particularly in relation to harassment.

The FCA is likely to be of the view that if a firm has cases of bullying, victimisation, harassment and discrimination among its workforce, such practices may be reflective of a poor culture within the firm – a culture that may have both direct and indirect consequences for the firm’s quality of service to its customers and clients. The fitness and propriety of relevant individuals to operate within the industry will be called into question.

On a more positive note for Citigroup, the Employment Appeal Tribunal (EAT) in Citibank & Ors v Kirk [2022] EAT 103 recently decided to overturn the employment tribunal’s (ET) decision that the bank’s dismissal was discriminatory on the grounds of age. The claimant succeeded at ET in his claims of unfair dismissal and age discrimination (in part) following his dismissal by reason of redundancy from Citibank at the age of 55. He was awarded just under £2.7 million in compensation. Citibank appealed, arguing that he could not have been subjected to discrimination on the grounds of age because the restructuring that led to the loss of his job also resulted in the promotion of a 51 year old female colleague to head of department. The EAT agreed that the ET appeared not to have given due consideration to the respondents' evidence in regard to the claimant and the comparator being in the same age bracket, and their explanation that age could not be reason for the alleged discriminatory treatment. The matter has been remitted to the same tribunal to reconsider the respondents’ alleged reason for the ‘impugned’ treatment.


Return to news headlines

Penningtons Manches Cooper LLP

Penningtons Manches Cooper LLP is a limited liability partnership registered in England and Wales with registered number OC311575 and is authorised and regulated by the Solicitors Regulation Authority.

Penningtons Manches Cooper LLP