Scottish Affairs CommitteeWritten evidence submitted by Chidi Obihara

1. I left Morgan Stanley following a sustained period of racist abuse and a complaint I made to the FSA and SOCA regarding troubling practises at the firm, in 2005. I signed a compromise agreement waiving my right to sue them hoping this would stop them from making further defamatory statements against me (copy available on request).

2. I reported an assault to the local police station but was told that they wouldn’t take a report as it “should be dealt with by the firm”. I understand now that London banks in fact funded a PFI based relationship with the local police. I am in the process of confirming that there was a radio 4 BBC report into the matter, but the local police consider this uncontroversial.

3. During my time at the firm many things went wrong, ranging from poor or inadequate supervision to market abuse by traders linked to senior European bankers. I blew the whistle, lost my job and have been unable the work in the industry I trained for all my life since. There were some good individuals—within this difficult system—notably I received an apology from the then head of fixed income and now head of EMEA—Colm Kelleher. A decent man hamstrung by the system that he works in and that is unable to stop the actions of a truly unpleasant group of people.

4. Prior to leaving the firm, I had been put through over 30 hours of cross examination by a team of HR staff and lawyers from Simmons and Simmons hired by Morgan Stanley. I was unrepresented. I later reported Simmons and Simmons to the law society, because they falsified the minutes of those in-house interviews with their team of lawyers lead by Julian Taylor a partner at the firm. Perhaps because I was not allowed representation, they later changed the “minutes” to “notes” and denied falsifying the testimony I gave. The law society said that their actions were “errors”.

5. In 2007 the now defunct Dresdner bank stated that they had contacted Morgan Stanley staff before withdrawing my signed employment contract. I later lost a claim of post-employment victimisation against them because both banks called in QCs and spent millions of pounds to stop the truth about their actions being heard. By the end of the case I tried to represent myself, but with a QC arguing the case for the bank and the judge dismissed the case for technical reasons during a pre-trial hearing.

6. One of the important aspects of the case involving Morgan Stanley and Dresdner banks was that they used a firms like “control risk plc” and “kroll” who are known across the industry for keeping records on individual bankers. A service they said did not breach any local laws.

7. On their websites above they say they carry out bespoke searches on individuals. At a recent industry conference. I asked one officer of controlrisks who told me she was unaware of any laws stopping them from maintaining an “informal” list of individuals. However I believe that this is incompatible with recent whistle blowing legislation—individuals now have the obligation (not just the right) to report wrong doing, but in doing so, they will be covertly banned by the banks in a way that is not vetted by neutral agencies like the FSA who keep legitimate lists.

8. Before I entered this process, last month in fact, I wrote to Morgan Stanley to ask them again not to continue to blacklist me. While the head of EMEA—Colm Kelleher—seemed willing to at least consider making it so, unfortunately the head of HR refused to follow his instructions. The HR led culture of blacklisting is deeply entrenched and is held as a counterweight to whistle blowing by individuals.

9. The crux of my submission is that the role that these firms (banks and their chosen “investigators”) play must be considered in relation to the FSA or other legitimate regulation/legislation. The financial services authority runs a legitimate list of banned individuals who have been shown to commit specific offenses. Firms like Morgan Stanley on the other hand appear to pre-emptively exclude individuals who might have reported them for carrying out such acts. Thus preventing FSA bans for the appropriate individuals.

Thank you for your time. And forgive the rudimentary nature of my submission. I am not a lawyer and cannot afford one right now. But need your help.

It is my intention to also write to the US sub-committee on investigations because I believe that cases like mine are not isolated, the individuals in involved are.

I am hoping that the culture of inappropriate banking behaviour towards whistle blows can be changed.

March 2013

Prepared 15th April 2013