City worker who blew the whistle on financial malpractice wins unfair dismissal claim

26 Jun 2020 By Elizabeth Howlett

Experts highlight employer’s attempt to conduct ‘discreet’ disciplinary hearing behind claimant’s back is a ‘perfect example’ of how such cases can arise

A City executive who blew the whistle on financial malpractice and was subjected to ongoing victimisation after her employment ended was unfairly dismissed, a tribunal has ruled.

The east London tribunal found Ms Svetlana Sinelnikova was unfairly dismissed when foreign exchange broker ActivTrades suspended her for gross misconduct after she attended a work trip while signed off sick. It concluded that the company attempted to “attack her credibility” following Sinelnikova blowing the whistle on financial malpractice.

The tribunal said ActivTrades’ treatment of Sinelnikova caused “a very high level of injury to her feelings” over a sustained and long period of time, describing the actions of the organisation as “concerted and malicious”.

Sinelnikova was head of compliance at ActivTrades from April 2016 and had never been subject to any performance management, up to the point of her dismissal. There was also no evidence of any negative formal appraisal.

On 1 June 2017, ActivTrades’ founder and chief executive Alex Pusco contacted Sinelnikova and asked her to open an account in his name, and urged the request be kept confidential. She informed Jon Friend, her manager and compliance director at the time, of the request and discovered that previous requests of a similar nature had been refused.

Over the course of 2017, Sinelnikova flagged various other requests made by Pusco and  head of sales Arthur Boissiere that raised legal concerns over compliance with Financial Conduct Authority (FCA) rules and regulations, which she was responsible for upholding, resulting in Pusco and Boissiere accusing her of exerting “unfair power over her colleagues”. The tribunal said a lack of evidence suggested this accusation was an attempt to damage Sinelnikova’s credibility.

Between March and December 2017, Sinelnikova was also asked to attend several meetings to discuss delays in processing new clients that were harming revenue. Although the delays were caused by the need under FCA rules to investigate clients who had been flagged because of suspicious activity, the tribunal heard the blame was put on Sinelnikova.

In these meetings, Sinelnikova was also blamed for delays to the rollout of a new data security compliance protocol, however the tribunal decided the responsibility for the rollout lay elsewhere.

After one such meeting in November 2017 during which Sinelnikova was shouted at, she was admitted to A&E several times over the following days with chest pains, a suspected panic attack and abdominal pains. On 27 November she was signed off by her GP for two weeks with stress and anxiety.

In December 2017, Friend asked her to assist him on a business trip to Dubai, which she did after consulting with a specialist, but remained signed off. The tribunal heard that head of HR Stuart Gee doubted she was actually working in Dubai due to suspicions and rumours that her and Friend were in a relationship. Gee suspected the pair were having a “romantic holiday” at the company’s expense.

The tribunal found Gee had conducted a “covert disciplinary investigation” by contacting her GP in an attempt to ascertain if the sick note was genuine, and checking to see if she had sent work emails during her time in Dubai.

The tribunal said: “We were surprised that, as an HR officer, Mr Gee did not try the most obvious route: by asking the claimant or Mr Friend [if they were working] directly”, adding that ActivTrades was “looking for a reason” for Sinelnikova to leave the business, and “jumped to the conclusion” that she had committed gross misconduct.

On 12 December 2017, Sinelnikova was signed off for a further 2.5 weeks and prescribed antidepressants.

On the 13 December 2017 while signed off work, Sinelnikova discovered she could not access her personal emails or make compliance decisions and that a new employee – Mr Gordon – had been “placed in her seat” and given access to compliance records.

Acting out of concern for clients, and holding the reasonable belief that no one should have access to this information without authorisation and relevant checks, alongside the instinct that ActivTrades was likely to breach legal obligations to the FCA, she lodged a grievance via email on 15 December blowing the whistle on her concerns of financial malpractice within the company, which she was still responsible and accountable for. She was subsequently invited to a disciplinary hearing on the same day.

Sinelnikova’s grievance outlined ActivTrades’ potential non-compliance with FCA laws. She also accused the firm of sex discrimination, however this claim was not upheld.

Sinelnikova resigned in February 2018 and the tribunal found that following her resignation, ActivTrades refused to give her access to personal data held on her work computer, including details about her personal life and family. In March 2018, the firm also falsely accused her of “running her eBay account” during work hours and downloading illegal music. 

ActivTrades also threatened legal action against her in the High Court for starting employment with an alleged competitor, and filed for damages in excess of £384,000: an action that the tribunal said was “without justification”. 

The tribunal said all of the claims made by ActiveTrades against Sinelnikova were “unfounded”, and that Sinelnikova had been victimised and unfairly dismissed. 

It added: “The injury to feelings had had a profound effect on almost every aspect of her life” and awarded Sinelnikova a total of £76,510 in compensation, including £40,000 damages for injury to feelings, adding that ActivTrades’ “continued actions after she left employment were largely to blame”. 

Andrew Willis, head of legal at HR-inform, said the case raises several issues around conducting discreet disciplinary proceedings and “brings home how important it is to thoroughly investigate all allegations against employees in order to substantiate and justify them,” he said.

“Individuals should be aware that they are being subjected to a disciplinary in order to defend themselves properly. Contacting external witnesses behind their back to potentially weaken their defence, as seen here, is another perfect example of how unfair dismissal can arise.”

ActivTrades has been contacted for comment. Sinelnikova could not be reached for comment.

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