The London Stock Exchange has admitted that last year’s dismissal of Turquoise chief executive Eli Lederman was unfair.
Lederman was swiftly replaced by LSE chief information officer David Lester following the move.
In a London employment tribunal – that began yesterday and will finish at the end of next week – the LSE said it had not acted fairly in its sacking of Lederman following its acquisition of the dark pool trading venue that he headed. Lederman is accusing the LSE of “unreasonable” conduct in the lead up to his departure, and of unfair conditions during his ‘gardening leave’.
The LSE reportedly contests details of the allegations brought by Lederman.
The case threatens to bring to light extensive documentation around business practices at the time of the acquisition of Turquoise in February 2010. The maximum possible compensation available to Lederman, should his case be successful, is approximately £80,000.
But any compensation would be affected by whether Lederman proves that the LSE failed to follow TUPE procedures around the takeover. Under the legislation, he is arguing that he should have become an LSE employee. But the LSE is reportedly contesting this, saying that Turquoise remained a separate operating entity.
The exchange declined to comment.
Lederman had said he took the decision to sue "when it became clear that other members of the Turquoise team were also pursuing claims against the LSE". It is not clear if other claims have been filed.
In other news, after the LSE bought Turquoise the exchange made a number of system changes at the dark pool venue. With Lester at the helm, it ripped out the existing Java-based Cinnober TradExpress platform and introduced the C++ written Linux-based Millennium Exchange system from Sri Lankan supplier Millennium IT, which it had recently acquired.
Since trading on the new system began, the LSE has had several lengthy, high profile outages. The exact reasons have not been disclosed, but this month Computerworld UK revealed that changes to closing auction procedures had led to severe market data system troubles.