A senior banker is suing EFG Private Bank in an employment tribunal case claiming he was unfairly dismissed after raising whistleblowing concerns about alleged weaknesses in the bank’s controls and systems for dealing with high-risk transactions.
Dmitri Rozanov, who was managing director of private banking at EFG and who was market co-ordinator for Russia and eastern Europe, has taken the bank to an employment tribunal claiming his dismissal last August was the result of protected disclosures he made to EFG as a whistleblower.
EFG, which is the UK arm of Swiss-based private bank EFGI Group, is vigorously contesting the case and says Mr Rozanov was made redundant because he was not a “significant rainmaker” and his job disappeared. The bank said a formal investigation had not upheld his claims.
Mr Rozanov, who joined from Coutts in 2015, said in a witness statement to the tribunal that he raised a number of protected disclosures to EFG including raising concerns that some of its client managers saw compliance as a “burden instead of a protection”. He also says he flagged concerns about a proposed $100m transaction where an unnamed individual with a relative in the Russian Parliament wanted to deposit funds into an EFG client’s account to buy distressed assets.
He says that the client relationship manager dealing with the transaction had failed to flag to EFG’s Guernsey arm that the individual was a high-risk politically exposed person (PEP) by association and this would require enhanced due diligence. The issue was spotted by another EFG employee and the transaction did not proceed.
Mr Rozanov also claims he made other whistle blowing disclosures including raising concerns about the move of one unnamed client’s account from Guernsey to the bank’s Monaco offices which is a separate legal entity. The client’s father was an associate of Russian president Vladimir Putin and as such was a PEP, he claims in the witness statement provided to the Central London Employment Tribunal hearing which finished on Tuesday.
Diya Sen Gupta, barrister for Mr Rozanov, claimed in her closing submissions that her client was a “responsible whistleblower” and his team was the “first line of defence” in stopping “dirty money from entering the financial system.” She alleged that EFG viewed him as a “troublemaker” and chose to “ignore his warnings and brush aside his concerns.”
However EFG bank witnesses have told the tribunal that Mr Rozanov was made redundant because he was not successful in managing his team and because his job disappeared when another EFG colleague was appointed as head of private banking in July 2017.
John Reed, chairman of EFG in the UK and who is the bank’s designated whistleblowing champion, said in his witness statement that Mr Rozanov did not raise any compliance concerns to him.
Anthony Cooke-Yarborough, chief executive of EFG in the UK, said in his witness statement that Mr Rozanov did not alert the Financial Conduct Authority to his concerns and only raised the issues through his solicitor for the first time a month after his redundancy. “Dmitri has made an extremely serious allegation against EFG…yet he failed to escalate any of these issues during his employment. “ he said adding that a formal investigation by the bank had concluded that no protected disclosures had been made by Mr Rozanov.
EFG said in a statement: “The allegations were made by a former employee in the context of a claim he brought against EFG Private Bank after he was made redundant. His allegations were investigated thoroughly by the bank and were not upheld. EFG takes its regulatory responsibilities very seriously and is vigorously defending against the claim.”
EFG was fined £4.2m by the FCA in 2013 for having weak anti-money laundering controls on high-risk accounts at its UK subsidiary between late 2007 and early 2011.
The employment tribunal is set to give its ruling in October.