Home » Business News » 2011 » February » February 22, 2011

Tullett Prebon plc and Others v BGC Brokers and Others (BGC)

February 22, 2011 - London, United Kingdom And New York, New York And Hong Kong, China And Singapore, Singapore

Tullett Prebon (LSE: TLPR) welcomes today's Judgement in the Court of Appeal which rejected all the appeals lodged by BGC following the UK Court's finding in March 2010 that there had been a conspiracy between BGC, Tony Verrier and Shaun Lynn to poach Tullett Prebon employees.

On 18 March 2010 Tullett Prebon won its unlawful conspiracy claim against BGC Brokers LP and two of its senior executives. Mr Justice Jack determined that BGC, Shaun Lynn and Tony Verrier were guilty of an unlawful conspiracy to poach teams of Tullett Prebon brokers and to use four Tullett Prebon desk heads to recruit their own desks of brokers to BGC. He also concluded that ten brokers who had walked out from their contracts with Tullett Prebon had acted unlawfully.

BGC and the brokers sought to appeal against the Judge's decision. They argued: (i) that the Judge was wrong to find that four of the brokers had behaved unlawfully in walking out of Tullett Prebon before their contracts expired; (ii) that the Judge was wrong to find that three Tullett Prebon brokers who had signed up to join BGC but then decided to stay at Tullett Prebon were entitled to do so because of BGC's illegal and dishonest behaviour; (iii) that the Judge had misunderstood the evidence before him at trial; and (iv) that the Judge was wrong to grant injunctions preventing BGC from recruiting Tullett Prebon brokers for a year and keeping ten brokers who had walked out from Tullett out of the market for between 9 months and a year.

The appeal was heard in December 2010. BGC withdrew its challenge to the Judge's decision to grant Tullett Prebon a "no poach" injunction (stopping BGC recruiting from Tullett for a year) during the course of the hearing. In addition, BGC's barristers decided not to make any oral arguments in support of an appeal brought by brokers against the Judge's decision to keep them out of the market for a year (nine months in one case) after they walked out from Tullett. The Court of Appeal was left to rule on the remaining grounds of appeal.

On 22 February 2011 the Court of Appeal unanimously rejected BGC's appeals, describing the Judge's Judgment against BGC as "meticulous". Three Lord Justices held that:

It was unlawful for the Defendant brokers to walk out from their jobs at Tullett. Tullett's conduct towards them after they had decided to move to BGC had been entirely proper.

BGC's claim that it did not owe obligations of trust and confidence to brokers who signed forward start contracts to join it was "sterile". BGC's argument that brokers were required to join once they had signed contracts to do so despite the fact that BGC was itself behaving illegally were "wholly unmeritorious" based on "a selective and blinkered representation of the evidence", and were "an exercise in cherry-picking, albeit of a somewhat putrid cherry".

The Court of Appeal also held that BGC was "wise" to withdraw its challenge to the injunction granted against it in light of the "devastating critique" of BGC's arguments advanced by Daniel Oudkerk QC, Leading Counsel acting for Tullett. It held that Tullett's arguments were "built ... on the full range of BGC's discreditable conduct in this affair".

Charlotte Kirkham
+44 (0)20 7920 2331

Investors and Analysts
Tullett Prebon
Nigel Szembel


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