Grant David Vincent Williams v. Jefferies Hong Kong Ltd

Read the full judgment text of HCA 320/2011 on BabelCite. This High Court CFI judgment was delivered on 20 June 2013.

1. The defendant is a Hong Kong company trading in the financial services industry.  It commenced its activity in Hong Kong in or about the early part of 2010 but although new on the scene then, it was a subsidiary of an international group apparently based in New York, USA with other established subsidiaries in the United Kingdom and elsewhere.  The extent of the network within the group has not been explored and is not relevant for the purposes of this action.  The group is nonetheless engaged

Cited by 1 case · Cites 1 case

Case No.HCA 320/2011
Court
High Court CFI
Date20 Jun 2013
Judge
Case Document
100%Judiciary

HCA 320/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 320 OF 2011

________________

BETWEEN

  GRANT DAVID VINCENT WILLIAMS Plaintiff

and

  JEFFERIES HONG KONG LIMITED Defendant
____________________
Before: Deputy High Court Judge Seagroatt in Court
Dates of Hearing: 11, 13, 14, 17 and 19 June 2013
Date of Judgment: 20 June 2013

________________________

J U D G M E N T

________________________

Introduction

1.The defendant is a Hong Kong company trading in the financial services industry.  It commenced its activity in Hong Kong in or about the early part of 2010 but although new on the scene then, it was a subsidiary of an international group apparently based in New York, USA with other established subsidiaries in the United Kingdom and elsewhere.  The extent of the network within the group has not been explored and is not relevant for the purposes of this action.  The group is nonetheless engaged in global securities and investment banking activities, having been established in 1962 in the USA.

2.The personalities employed by the group who feature in the chain of command and decision relative to this matter are Brian Friedman, Chairman of Jefferies Executive Committee, Jason Griffith, Head of Global Equities in New York, John Noonan, Chief Operating Officer of Global Equities in New York, Thea Fforde, Managing Director and Head of International Compliance based in London and Michael Alexander, Chief Executive Officer of Jefferies Asia, employed by the defendant company, but responsible for the other offices including Singapore, Japan and India.  Most if not all of these Asian offices, including Hong Kong were in the early stages of developing the market for the group’s financial services.

3.The plaintiff commenced employment with the defendant company on 26 August 2010 as Head of Equity Trading Asia with a title of Managing Director.  That title however did not carry with it a seat on the board. His letter of engagement was dated 19 July 2010.

4.He had been working in this financial field for over 25 years, his previous employment having been in Singapore with a company entitled Bay Trading International Group.  During the course of that employment he had conceived the idea of publishing a daily newsletter and developed this accordingly.  The idea may not have been original but with the collation of publications in the financial world, and that means worldwide, he was no doubt able to impress his own stamp upon it.

5.When he commenced working for the defendant company its Chief Executive Officer, Michael Alexander, had not yet arrived to take over the reins of the emerging company.

The daily newsletter

6.The plaintiff brought this concept with him to the financial world of the Jefferies Group.  It did of course require the approval of his new employers and a clear‑cut mutual acceptance as to how its publication was to be effected.

7.He described the publication, entitled “Things That Make You Go, Hmmm…”, as having an “edgy and colloquial tone and content” with the intention of “pushing the boundaries of edginess to maintain the integrity of the publication as well as the interest of ….. subscribers”.  It was, as both sides agree, intended to be a marketing tool.

8.The plaintiff sent an example for the consideration of the group at a high level.  In response to the question “What do you think?” from Brian Friedman, Jason Griffith replied:

“Clients universally like it … We should brand it as a Jefferies product and start distributing to our clients.”

A little later — within an extremely short time‑scale — Jason Griffith added:

“This is mostly a market recap but it is a more interesting read for clients than most notes. Compliance can get comfortable but really wanted you to see the more irreverent tone … Clients love it.”

Approval in principle came quickly and unarguably with enthusiasm.  Minds then set to work on the procedure for review and approval of each daily newsletter before it was in fact published.

The review/approval system

9.Much e‑mail contact was generated in the search or thinking to achieve an effective check on the content of the newsletter.  On 26 August 2010 John Noonan said to Jason Griffith:

“Until Mike Alexander lands in Asia we need a Europe-based equity supervisor to cover Grant [the plaintiff] and pre-view/ approve each daily note before it goes out.”

This was confirmed to Thea Fforde and others and Bob Albano replied:

“Once it’s approved in London it can be released globally …”

and another e‑mail from John Noonan said “Diamandis is on board to cover.”  Diamandis is Diamandis Karamagias, the Managing Director and Chief Operating Officer of the International Equities business of Jefferies International Limited, another subsidiary of the group, based in London.

10.Thea Fforde, also in London, e-mailed to the plaintiff (on 27 August 2010):

“Please make sure you adhere to that guideline (sourcing data/charts copyrights etc.) when producing your note as that will make it easier for the reviewer/approver …

The supervisor who will review and approve your piece is Diamandis Karamagias … (he) has been briefed on the requirements for this piece.  It would be helpful … for you, me and Diamandis … to go through protocol.”

Four days later her e‑mail contained the following:

“When you send the note to Diamandis tomorrow for review/ approve … Diamandis will review your piece for inappropriate language, slurs, rumours, excessive promises, etc. …

Once Diamandis has reviewed your note he’ll e‑mail you to let you know it is okay to go out … Robin (Greenwood) and Toni (Rizk) are members of the London compliance team and will conduct spot checks (post approval/distribution) of your piece.”

11.In accordance with this protocol — the term used by Thea Fforde — publication proceeded on a daily basis with the newsletter sent from Hong Kong by the plaintiff to New York and London, with approval awaited from London to Hong Kong and New York, from where it would be distributed in accordance with a list of recipients.  On one occasion Diamandis Karamagias corrected a reference to the leader of North Korea from “North Korean Dictator” to “North Korean Head of State”.  Some might regard that adjustment as somewhat pedantic, at best cosmetic, but, in any event, inconsequential.  It did however indicate that the reviewer certainly took his job seriously in the Anglo‑Saxon diplomatic tradition.

The issue of 7 December 2010

12.This issue was e‑mailed to Inge Ivechenko, the Personal Assistant of Jason Griffith in New York and to Diamandis Karamagias in London in accordance with the protocol established in late August.  The e‑mail message from the plaintiff accompanying it was:

“I am travelling so Inge, would you mind sending this out for me today? I will send you the latest dist[ribution] list by separate e‑mail. D[iamandis] Can you please reply to all so Inge knows when this can be sent out?”

13.This edition of the newsletter consisted of 31 pages, which with the exception of the introductory fly‑sheet and three pages of editorial introduction, comprised a series of articles and/or extracts from other publications.

14.By error it was published to the subscribers without review/approval by Diamandis Karamagias. Events then took a drastic turn within an extremely short time even allowing for the time lag between three continents.  I need to consider these before I return to the publication itself.

The “fallout”

15.The newsletter was released to the 900 or so subscribers in accordance with the distribution list.  Unfortunately Inge Ivechenko in New York set the release mechanism in motion before receiving approval from Diamandis Karamagias in London.  In her e-mails she readily acknowledged that it was her fault.

16.However the senior personnel at Jefferies in New York decided that the plaintiff was at fault.  It is obvious that there must have been some exchanges between them, and perhaps, with senior colleagues in London, but if these were in e‑mail — and I anticipated that some of them must have been — they have not seen the light of day in this action.  Furthermore, none of those primarily responsible for making the decisions which have led to these proceedings have given evidence in this case, although Mr Alexander said that he was involved in the decision.

17.There is an e‑mail from Jason Griffiths to Michael Alexander (the latter did give evidence) dated 8 December 2010 (Hong Kong time 12:29am) which said simply:

“We have a serious problem re: the one sent out today with a Hitler video.”

18.It is significant how loose the language was.  The newsletter did not go out “with a Hitler video”.  It made an incidental reference to the existence of a “Hitler video” without any comment save as to an unambiguous and sensible warning concerning its use of many expletives.  It left it to the reader of the newsletter to make the effort to look at the video depending on whether he or she wanted to.  The reference is no different from the reference to a magazine, book or film.  Access to the material happened to be more immediate as a result of modern electronic advance.  Nothing suggested an association of Jefferies with the content or purpose or identity of the parody contained within it.   It has been argued that because the words “Hitler video” had a degree of highlighting in blue — minimal as I find it to be — it somehow was tantamount to a promotion or invitation.  I reject that.

19.Three minutes after the e‑mail from Bob Albano to Michael Alexander the former sent the following e‑mail to Thea Fforde and Diamandis Karamagias:

“[for your information] … ‘damage control’ will be directed by NY [New York]. Will keep you informed.”

20.Just over an hour later Mr Albano sent an e‑mail to others but linking in Thea Fforde and Diamandis Karamagias:

“Change of plan. Think in terms instead, of sending the ‘message’ below to all recipients of the original piece. Stop working on the recall line.”

21.However the “message” is not identified on the copy of the e‑mail disclosed in this case.  It may be that which features in an e‑mail from Inge Ivechenko under the heading — “A message from Jefferies” — sent by her, it appears, on the instructions of Michael Roca, Senior Vice‑President in the Compliance Department following Albano’s change of plan:

“Please be aware that we inadvertently distributed Grant Williams’ December 7, 2010 edition of ‘Things That Make You Go, Hmmm …’ before it was properly vetted. That piece contained third-party material from a website that we do not condone. To the extent that piece is still in your inbox, we would ask you to delete it. We seriously apologise for the inadvertent distribution of this material.”

22.It is safe to assume that Miss Ivechenko did not draft this.  Once again a factual error of some importance was included — “That piece” did not contain third‑party material.  Furthermore the “material” was not distributed.  It contained a reference to the existence of a piece of material.  The distinction is not a pedantic one.  It was also described as “Grant Williams’ … edition”.  Though he was the editor/author, it was a Jefferies publication.  At the same time she sent e‑mails unequivocally indicating that it was her fault and that she would be “taking that bullet”, to which a Chris Shute replied “Absolutely not — I will have a word with Grant re content.”

23.A series of e‑mails passed between Inge Ivechenko in New York and the plaintiff in Hong Kong, once the time zone differences had been ironed out, in which it is clear that Miss Ivechenko was reassuring the plaintiff of how favourable the readership was to his style and content and how she had tried to clarify that it was not his fault but hers because she had not waited for approval to come through (from Karamagias in London).

24.At 8:48pm Hong Kong time, the plaintiff had sent the newsletter through to Miss Ivechenko in New York (7:48am) and Diamandis Karamagias in London (12:48pm).  It had actually been sent out to subscribers 10 minutes later by accident.

25.By 5pm Hong Kong time, the following day, Michael Alexander, having been tasked with the burden from New York, met the plaintiff and summarily dismissed him for gross misconduct.  He handed to the plaintiff a letter emanating from Nicola Hardy in Hong Kong, no doubt on instruction from New York, the relevant part of which reads:

“... Your employment with us is hereby summarily terminated on the grounds of your unacceptable and entirely inappropriate misconduct. The detail of this has been discussed with you by Michael Alexander and Shahina Kasak.”

The letter did not articulate reasons probably because it was impossible to do so intelligibly.

26.There had been no such discussion of detail and that is common ground. Mr Alexander says in his statement that he informed the plaintiff that he was summarily dismissed for gross misconduct, and handed him the letter.  He added that the plaintiff told him that the newsletter had been sent to Mr Karamagias for prior approval before it was sent out and that he had not sent it out himself.  Mr Alexander refused to discuss it further.  The plaintiff was asked to hand over his “Blackberry” — and perhaps other items such as keys and access codes.

27.At 5:32pm Hong Kong time, Mr Alexander reported back to Jason Griffith by e‑mail:

“I have just finished speaking to Grant and he has left the building.”

28.If the e‑mail said more than that, we have not had the opportunity of reading it. The meeting in the office had thus taken little more than two minutes.  The messenger had done little more than convey the decision from on high.  No opportunity was afforded to the plaintiff to discuss or say any more than a basic fact.  A mere 20 hours 44 minutes had elapsed since the newsletter had gone to the United Kingdom for review.  The independent subjective observer would reasonably inquire, why had it led to this?

The review system

29.It was decided to establish this in order to approve the content of the newsletter that the plaintiff brought with him before it was published as a Jefferies communication to their clients, existing or potential.  Contact between New York and London resulted in Diamandis Karamagias being designated as the man with the responsibility for ensuring that the newsletter met the concerns of the Jefferies Group which was to publish it.  It was to be a corporate publication.  Extracts from the series of e‑mails set the scene for the thinking and the ultimate decision:


“Who will review and approve?”

14/8/2010

“… and get it signed off by the appropriate supervisor in London prior to each distribution.”

16/8/2010

“… as we work out guidelines and process for your piece.”

25/8/2010

“Who [is] the business supervisor … Who will review and approve each piece before it is put in motion?”

25/8/2010

“Who in Asia could do it?”

25/8/2010

“Asia: Michael Alexander or Chris Shute (both scheduled to join in mid Oct. or later)”
“U.K.: … [2 persons named] or Diamandis Karamagias …”

26/8/2010

“We need a Europe-based equity supervisor to cover Grant and pre-view/approve each daily note before it goes out.”

26/8/2010

“Who will be the supervisor/reviewer?”

27/8/2010

“We need an equity supervisor based in the U.K. to pre-view the note in the U.K. morning/Asia evening.”

27/8/2010

“I made the decision that once it’s approved in London it can be released globally.”

27/8/2010

“… call with Diamandis … and get them to agree to sign off on ‘Hmmm’ starting Monday.”

27/8/2010

“Already done.  Diamandis is on board to cover.”

27/8/2010

“Done.  Diamandis will cover … will relay to Grant that he is good to go.”

27/8/2010

[To the plaintiff:]
“Please make sure you adhere to that guideline (data/chart copyright etc.) when producing your note as that will make it easier for the reviewer/approver.  At the initial stage, the supervisor who will review and approve your piece is Diamandis Karamagias … [he] has been briefed on the requirements for this piece.  It would be helpful … for you, me and Diamandis … to go through protocol.”

27/8/2010

“Diamandis … please connect with Grant and review and approve the substance today.
Grant — You are clear to proceed on producing the daily note with daily pre-approval by Diamandis.”

27/8/2010

[Finally again to the plaintiff:]
“When you send the note to Diamandis tomorrow for review/approval … Diamandis will review your piece for inappropriate language, slurs, rumours, excessive promises etc. … once Diamandis has reviewed your note he’ll e‑mail you to let you know it’s okay to go out … Robin and Toni are members of the London compliance team and will conduct spot checks (post approval/distribution) of your piece.”

31/8/2010

30.Those e‑mails, essentially passing between New York and London, in a little over a two week period, were concerned with the setting up of a review/approval system for the newsletter to prevent the substance, i.e. the content, containing “inappropriate language, slurs, rumours etc” quite apart from copyright concerns.  A protocol was in force.  This was by no stretch of the imagination to be a cursory check or “negative vetting”, whatever that term may mean.  These words do not appear in the careful consideration given to achieve what was regarded as very necessary and may be simply the products of advocacy designed to weaken the ground so as to lend some arguable force to what the defendant company contended was the prime and ultimate responsibility for a system which failed, viz the plaintiff’s.  Even the term “spot-checks” is inapposite save by reference to some form of “post facto” exercise after approval/distribution. 

31.Mr Karamagias, in his statement, suggested that “… it was never intended that I would conduct a thorough review of the Daily Newsletter … This was not what Ms Fforde asked me to do.”  Ms Thea Fforde does not support him on this.  He modified this stance in his evidence.  I do not accept what he says.  It flies in the face of the protocol established and all that had preceded it.  His decision in one newsletter to change the description of the leader of North Korea, from “North Korean Dictator” to “North Korean Head of State” indicates a somewhat pedantic approach which belies the nature of the review he tried to portray as his limited responsibility.  There are other aspects of his evidence which indicate, sadly, an unrealistic approach.  I accept however that in the light of some of his evidence he would not have approved this newsletter but that is not relevant to the issues in this action.

32.Even Mr Alexander sought to fly in the face of the obvious when he suggested that it was not an approval process by the management.  He it was who used the odd phrase, in the context of this publication, ‘negative vetting’, as the exercise to be carried out.  It would surprise him, he said, to know that there was an approval/review process.  He thought that it was more concerned with style.  He was however aware that it was not the plaintiff’s fault that it had gone out.  And yet at the meeting at 5pm on 8 December in his office he refused to discuss the reasons for the plaintiff’s dismissal.  All this confirms that whatever he discussed and concluded with Jason Griffith as to how to deal with the plaintiff had severe and obviously unreasonable limitations.  The plaintiff felt he had been “thrown to the wolves”.  In my view he was more of a sacrificial lamb on the altar erected metaphorically, to J P Morgan.

33.The Jefferies Group intended to establish an overall system to prevent any contentious and/or embarrassing material slipping through.  Theirs was no half‑hearted exercise.  But it failed through simple human error, aided or abetted by an electronic system which is probably unforgiving in its rapid mechanical operation.

The newsletter

34.One has only to be reminded of the views of the senior executives or officers of the group as reflected by the e‑mails to appreciate their acceptance of it as a marketing tool for the group benefit, hence their ready adoption of it as a Jefferies’ publication, and their knowledge or awareness of its style:


“Good e‑mail.  Needs to be vetted.”

Jason Griffith

“Love the irreverent insights.”

John Noonan

“The analysis and commentary are fine.”

Bob Albano

“A lot of clients have given a very positive feedback … This is the kind of note that clients like to read and I think we should allow him to continue to publish it.”

Jason Griffith

“Clients universally like it and I think we need more differentiated content to become top of mind with our customers globally … We should brand it as a Jefferies product …”

Jason Griffith

“… will he [the plaintiff] express views inconsistent with our strategists, economists and analysts?”

Brian Friedman

“He may express views that are inconsistent with our research, strategists, etc. but that is no different than desk notes that are published by our traders and salespeople …
It is more interesting read for clients than most notes.  Compliance can get comfortable but really wanted you to see the more irreverent tone  … Clients love it … would like to continue it for now with the possibility of potentially wrapping it into our daily product distribution in some form …”

Jason Griffith

35.The fact that Jason Griffith emerges, at least on record, as demonstrating enthusiasm on his own part as well as reflecting the interest of Jefferies’ clients, does not hide that, with full knowledge of an irreverent tone — and “that compliance can get comfortable” — a general welcome was given to the newsletter.

The issue of 7 December 2010

36.Over 40 issues of the newsletter adopted by the Group as its publication were published within the structure created for it.  On one previous occasion it slipped through without approval/review but nothing turns on this.  The detail of that circumstance has not been explored.  E‑mails record it as a fact.

37.How did this particular issue, the last to go out to the Jefferies Group clients, come to excite so much reaction as a result of its premature unapproved distribution and lead to such a peremptory dismissal for its author?

38.Because I have concluded that hypersensitive minds have led to a distortion of its content, it is important to repeat the opening paragraph before I comment on it:

“December 7th is remembered, as ‘the day that will live in infamy’ and, as I wake this morning to see gold surging, silver making another 30-year high (closing above $30 in the process) and the alleged ‘conspiracy’ in the ‘other’ precious metal creeping so close to the mainstream as to have a ‘Hitler Video’ all of its own (warning: expletive subtitles a-plenty), I am left wondering whether we will see a few more days in the near future that are as significant in the field of finance as the events in Hawaii were for the entire world back on this day in 1941.”

39.The Japanese attack on Pearl Harbour has been used, albeit perhaps with a degree of exaggeration, the licence of the commentator who wants to give stark relief to what may be a significant crisis in the financial world, in order to seize the readers’ interest.

40.There is a reference to the “alleged conspiracy in the other precious metal” — no sides taken here or lack of objectivity — followed by a simple statement of fact, without recommendation or opinion or partisan, subjective view, that there exists in the public domain a “Hitler Video” in common with many other “Hitler videos”.  There is a language health warning — sensible and necessary — but it is left entirely to the reader as to whether he or she wishes to view the video, to see the form and context of the parody.  Human nature being as curious as it naturally is, means that the reader is more likely to view it than not, assuming he or she has not already seen it.

41.Mr Karamagias said that the mere mention of Hitler’s name caused him to exclaim or think “Oh, my God!”.  That mere reference he said was inappropriate, although he seemed to try to tone that down by adding that he personally was not offended.  Then as a more extreme development of his thinking, he said the reference to the name of Hitler made him think Jefferies Asia was starting off on the wrong foot and that it raised the question of the suitability of Grant Williams for the Jefferies business.  Such a reaction is verging upon the absurd but I shall come to deal with the reasonable or unreasonable reactions to the name and its implications later when I consider the video itself.

42.He also went on to say, and this seemed to form the core of his evidence concerning the, to him, objectionable nature of the “marketing material” sent out, that it promoted a joke about the Chief Executive Officer of J P Morgan, Mr Jamie Dimon.  In my judgment there is nothing in the newsletter which could in anyway be reasonably interpreted as constituting the promotion of a joke concerning that personality in the financial world.

43.He also appeared to elevate to the level of significance, part of a discussion he had with the plaintiff concerning an occasion when the plaintiff had published a quotation[*] from Hitler’s early biography “Mein Kampf”, which had occasioned some adverse reaction by a reader.  That has no significance or relevance in this case.  I think Mr Karamagias has exaggerated what the plaintiff said to him in order to bolster the significance in his mind of the reference to Hitler.

44.Ms Thea Fforde also thought that the mere mention of Hitler’s name was inappropriate in the newsletter.  I do not need to repeat my view of this which Ms Fforde expressed a little more vehemently than Mr Karamagias.

45.To an outsider the format of the newsletter is attractive in its content and what I call the editorial or introduction is an interesting commentary on aspects of the financial scene.  It is easy to see why Jefferies found it something which could be used as a marketing tool, and why its clients found it stimulating.  It was no small achievement in my view to be able to put such a newsletter together on a daily basis.  The opening paragraph of this particular one is unexceptionable.

46.The defendant’s witnesses sought to stress that the plaintiff’s editorial reference had no place in a corporate publication.  This argument, maintained by Mr Maurellet in his submissions, proceeds from the misconceptions which abound in the judgments they made and the errors of understanding and of fact in which they persisted.  There is no reason at all why a commentary on the ferments in the financial world should not be made in an in‑house newsletter.  In fact it would be a bland, anodyne publication if it did not contain this — it would not then be the “edgy” colloquial, irreverent publication that the New York managers knew their clients liked and whose enthusiasm they endorsed.  After all, compliance could become comfortable.

The Hitler video

47.I find it necessary to deal with the video itself only because of the reaction of the decision‑making management and other employees who gave evidence and displayed significant errors of comprehension.

48.This is one of numerous videos based on a few scenes from the film “Downfall” in which the Swiss actor Bruno Gant plays Adolf Hitler.  The usual scene is Hitler’s bunker in the last days of the war as the Russian armies move inexorably on Berlin.  It is of course a parody, the critical part being the English subtitles projected at the bottom of the screen to correspond to the soundtrack in German.

49.Parody is an art form.  It has been with us since the Greek and Roman times, at least.  The theme or style, or both, of a person’s activity are exaggerated or applied to an inappropriate subject for the purpose of ridicule and effect.  It can be very savage.  It is used in literary articles, books, poetry as well as prose, plays, cartoons or caricatures, and films.  Its art form is not used to recommend, praise or condone the vehicle adopted to bring home to the observer or reader the message it seeks to convey.  It is the message, which often vilifies, which is the purpose.  In most cases humour is the potent force.

50.This video was in the public domain.  It was not recommended or adopted in the editorial piece written by the plaintiff who simply referred to it in the context of a financial controversy.  At least one of the witnesses referred to the video as being “embedded” in the introductory commentary to the newsletter which I have referred to as the editorial.  It was not “embedded”.  That is one of many terms misused by the witnesses for the defendant company in this case.

51.There is another misconception.  Mr Alexander said that he understood the plaintiff to be the author or creator of the video.  That is a fundamental error. What is also of concern is how many of the senior managers of the Jefferies Group were of the same opinion.  We do not know because they have not given evidence but Mr Alexander spoke of a discussion with Mr Jason Griffith about the newsletter and the video in which it was decided that the plaintiff would have to go, i.e. be summarily dismissed.  There had, he said, been discussions in New York involving a Mr Rich Handler understood to be the Chief Executive Officer in the Jefferies Group in New York.

52.In view of Mr Alexander’s fundamental error in attributing the creation of the video to the plaintiff, it is reasonable to assume at the very least that others — Mr Jason Griffith in particular — thought likewise.  He described the language to Mr Alexander.  The two of them had discussed the newsletter and agreed the consequence for the plaintiff. Mr Alexander said that the mere mention of Hitler’s name in the reference to the video concerned him and raised problems.  I find that such a reaction just does not make sense.

53.One must necessarily understand and accept that many people — not just people of the Jewish faith but the Slavic ethnic groups and other central and eastern European peoples, Hitler’s “untermenschen” — recoil at the mention of his name.  It is synonymous with indescribable horror and evil.  Perhaps even the English language is not extensive enough in its vocabulary to afford an adequate description.  It is however not rational to impose a form of censorship in relation to his name.  The idea of expunging it and those of other individuals in the Nazi party, would cause rational commentators to underline the potential risk of consigning events associated with it or them to a degree of undesirable obscurity.  It is an offence in some countries to deny the Holocaust of which Hitler was the prime mover or architect.

54.It is not sensible or realistic to censor his name out of a marketing publication.  Nor is it rational to suggest that the video itself, or the simple reference to it, denoted a racist or anti‑Semitic connotation.  Both Ms Fforde and Mr Karamagias said in their statements which they declared to be ones of truth, containing honestly held opinions, that the video was racist and anti-Semitic, and that it appeared that the newsletter was propagating such, or at least condoning it.

55.It is a matter of some regret that able, experienced and intelligent, and obviously successful persons, caught up unwittingly in this panic‑stricken, hypersensitive corporate reaction, who ultimately conceded that the prime concern regarding the parody video itself was their view that Mr Jamie Dimon, the Chief Executive Officer of J P Morgan was being vilified, should associate themselves with the notion that the simple reference to the video made the plaintiff and/or the video published on behalf of Jefferies, racist and anti-Semitic.  Such a notion is utter nonsense.  Ms Fforde also thought that the video was sexist.  It was not.  I think she may in any event have confused the female characters in the video.

56.These tags — racist and anti‑Semitic — are often used lightly without thought but are difficult to dislodge from people’s minds once used, especially when rumour and innuendo become accepted as fact or truth in the time it takes to “twitter” or “blog”.

57.Some of the subtitles on the video are, to many, obscene and offensive.  Viewed objectively their at least excessive use, adds nothing to the parody.  But I have to bear in mind that later in time Mr Dimon’s own use of an obscenity as adjectival describing his country in a publicised interview, might certainly be taken to justify or encourage the use of the same obscenity in some form in a parody highlighting the controversy which involved him.  I put three possible explanations for his use of an obscenity to Mr Karamagias and he adopted two of them in the alternative — either he was speaking to an audience adjusted to such type of language, or he was using it for effect.  I do not think that he was addressing a trading floor.  One view is certainly that he demeaned himself by using such a term — that might also be construed as a lack of respect for his audience.  In that context the obscenities in the parody, though excessive, might be seen as familiar colloquial language by a wide audience.

58.I have expressed some of my findings forcefully which may not find ready acceptance by those who have received them.  However in view of what I regard as irrational and patently unfair conclusions and expressions which have significantly affected a man in his career, it has been necessary to do so.

59.The human error by an employee has been unreasonably used in order to blame the very person whom the system was in effect to monitor and has stood the system on its head.  The desire to protect the possible sensitivities of a client or business partner also described as a competitor, has distorted an ability to assess matters on a common sense and efficient basis, and deprived the plaintiff of the chance of persuading his employers to stand back and see the folly of their precipitate actions.  In the case which the defendant has constructed against the plaintiff I detect the heavy hand of corporate loyalty seeking to guide the evidence.

Summary

60.The newsletter was adopted by the Jefferies Group and published by it in accordance with a review/approval system or protocol created by it.  The plaintiff was its editor (and original creator) but not its publisher.  It was collated and edited by him in the course of his employment.

61.The issue of 7 December 2010 was distributed before it had been reviewed and approved.  That was as a result of human error or a defect in the system established by Jefferies, or a combination of both.  That has not been examined in this case save to disclose that the personal assistant of Mr Jason Griffith accepted that she was at fault.  Nothing suggests that it called for anything other than an informal reprimand in her case.  I have not been informed whether this was adopted or even considered.

62.The consequence was that the plaintiff was summarily dismissed allegedly for gross misconduct.  The basis for this, according to the evidence from certain employees, is that in the newsletter was an inappropriate reference to Hitler and a reference to an inappropriate video known as a ‘Hitler video’.  There has been an unreasonable effort to “tar” him with overall responsibility because he was the creator or author of the newsletter, and its editor.

63.Those directly responsible for his dismissal have not come to give evidence to explain or justify their decision and be subjected to cross‑examination.  They have sent others, more remote from their consideration and decision‑making, to try and support and explain it, including the messenger who delivered the decision to the plaintiff.

64.The overwhelming inference to be drawn from the evidence given by Ms Thea Fforde and Mr Diamandis Karamagias is that the senior Jefferies executives were worried about the possibility that the Chief Executive Officer of J P Morgan might react to what might be perceived to be the adoption by Jefferies Group of the criticism in the financial world of his activities on behalf of J P Morgan.  The line of thinking, as I have indicated, lacks logic, and the direction of responsibility for the misconception at the plaintiff is irrational.  I have the feeling that there was an element of panic — perhaps even an hysterical reaction — by reason of the closeness of the Jefferies Group to Mr Jamie Dimon, or, what it perceived to be its relationship with him and/or J P Morgan.

65.At some stage that prime concern was broadened into a suggestion — tantamount as I find to a taint or smear — that somehow the plaintiff through the reference to Hitler, and indirectly the Hitler video, was inferentially indulging in racism and/or anti‑Semitism.  I do not propose to repeat my consideration of this a little earlier in this judgment but I have concluded that the suggestion of racism and/or anti‑Semitism emerged as an ex post facto justification for the plaintiff’s dismissal perhaps to screen or act as a makeweight for the real reason to which I have referred a little earlier.

66.There was simpliciter no justification for dismissal.  The publication was not his responsibility.  To the extent that it is necessary to consider — and I do not believe that it is — even the circumstances of his dismissal were palpably unfair.  A letter, which might be regarded as evasive and which was possibly drafted deliberately without detail, was presented at a meeting lasting two or three minutes in which the plaintiff was given no opportunity to understand the reasons for dismissal or put forward any argument.  The defendant is clearly in breach of the terms of the contract of employment dated 25 July 2010.

67.The way the defendant handled the matter of the plaintiff’s dismissal, the explanatory e‑mail and the excision of the plaintiff from all contact with and association with the company was, for the reasons set out earlier, in clear breach of the implied duty of trust and confidence which they owed him.  He was left “high and dry” and I shall review this aspect in a little more detail when I come to consider the matter of damages.

68.There will be judgment for the plaintiff for damages which I shall assess in due course, and costs to be taxed if not agreed.  I have delivered this judgment on liability separately so that the parties, the plaintiff in particular, know where they stand.  I understand that there will be an argument as to costs and I shall hear that after I have delivered the judgment on damages.

(Conrad Seagroatt)
Deputy High Court Judge

Mr Ashley Burns SC, instructed by Howse Williams Bowers, for the plaintiff

Mr Jose Maurellet, instructed by Simmons & Simmons, for the defendant  


[*] “The broad mass of a nation … will more easily fall victim to a big lie than to a small one.” — Mein Kampf 1925 (Vol 1)

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