Bank of America has suffered a string of departures from its hedge-fund services unit, in the wake of a storm over the dismissal of a former top executive.

The second-biggest US bank by assets has seen three top people leave the prime brokerage unit this year, along with several more junior staff. The turmoil comes after the bank fired Omeed Malik, a managing director in the unit, who had risen rapidly after joining the bank in 2012 from MF Global.

Mr Malik, 38, was dismissed in January in the wake of complaints from female employees about unwanted advances, according to people familiar with the situation. Mr Malik has since filed an $120m arbitration claim with Finra, the regulatory body where most securities industry disputes are heard, accusing executives at the bank of defamation, breach of contract, and discrimination based on his Muslim background.

Other senior departures from BofA include Michael Dolan and Kristin Maule, both directors in prime-brokerage sales, and Chris Throop, a managing director in consulting. More junior leavers include Jonathan Brenner, Katie Alberti and Sally Carlson, all vice-presidents in capital introductions. The employees all left voluntarily, according to people familiar with the departures.

“It is not uncommon for people to come and go this time of year,” said a BofA spokesperson, noting that the unit had hired 11 people since January.

The Charlotte-based bank had hired Mr Malik as part of a big push in prime brokerage, a business within investment banks that courts hedge fund managers, supplying them with everything from loans to research to introductions to investors. Combined prime-broking revenues across the top 12 global investment banks came to $4.9bn in the first quarter, according to Coalition, a London-based consultancy, up 19 per cent from a year earlier. The business has grown in importance for banks as trading has shrunk. Traditional cash equities trading was half the size of prime broking, at $2.5bn in revenue across the 12 banks in the first quarter.

Last year BofA ranked fourth by prime brokerage market share, in a bracket with Deutsche Bank and UBS, according to Coalition. Out front was Morgan Stanley, followed by Goldman Sachs and JPMorgan Chase.

Tom Montag, BofA’s chief operating officer, told investors at a conference last November that the bank was “getting a lot of market share in prime brokerage,” thanks to its “good and stable platform.” He noted that loan balances within the business had grown about 40 per cent within the previous year and a half.

Mr Malik’s last position at BofA was global head of capital strategy and head of Americas prime brokerage origination. In his arbitration claim, he alleges that he was fired after complaining that his London-based boss, Martina Slowey, lacked relevant licenses to supervise employees in the US.

Mr Malik’s lawyer, John Singer of Singer Deutsch, declined to comment.

After firing Mr Malik BofA also dismissed Joe Voboril, a director in prime-broking sales, and Valerie Ludorf, an associate in capital introductions. Both were let go for allegedly interfering in the investigation into Mr Malik, according to a person familiar with the situation.

With respect to Mr Malik’s Finra claim, BofA said: “the bank stands by its decision to terminate Mr Malik. His claims are without merit and we will defend ourselves in this matter. The bank had appropriate supervisory structures at all times.”

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