Credit Suisse heads for court

THE share-dealing scandal at Credit Suisse First Boston (CSFB) involving the so-called “Flaming Ferraris” will this week explode into full-blown litigation.
City firm Herbert Smith has assisted CSFB in its three-week investigation into the affair. The firm is now facing legal action by Adrian Ezra, one of three sacked traders.
He is suing for his bonuses – believed to be in excess of £1m.
Swedish equity arbitrage deals by the Flaming Ferraris, who are named after their favourite after-hours cock tail at the Nam Long Vietnamese restaurant in London, are being investigated by regulators in London and Stockholm.
The traders, who include James Archer, the son of millionaire novelist Lord Archer, were due to share around £5m in bonuses.
CSFB says it dismissed Archer and his two superiors, desk chief David Crisanti and deputy Adrian Ezra, following its investigation. Traders usually lose their bonuses once they have been dismissed, but at least one, Ezra, claims to have resigned.
Keith Oliver, a partner at Peters & Peters and Ezra's solicitor, says: “We regard the resignation as valid and effective, and [CSFB's] action as inappropriate and irrational.”
CSFB was unavailable for comment at the time of going to press.
Herbert Smith, one of CSFB's main law firms, was brought into the internal investigation to deal with disciplinary issues. The key partner leading the team is head of employment John Farr, who recently advised David Montgomery on his departure from Mirror Group.
Farr confirmed he was working for CSFB, but was unable to comment further.
The regulators, including London's Financial Services Authority and CSFB's ultimate watchdog the Swiss Federal Banking Commission, may fine the bank if they discover serious irregularities relating to the Ferraris' trading in shares of Swedish forestry group Stora.