UT (Tax & Chancery) UT-2022-000134 UT-2022-000135 UT-2022-000137 - [2025] UKUT 00214 (TCC)

Mr Sheth was an Associate EGB Trader at MHI during the Relevant Period.

Before joining MHI, Mr Sheth had studied Electrical Engineering and Communication and Signal Processing (including writing a thesis on the Black Scholes option pricing model), worked for almost three years as an interest rates analyst at a proprietary trading firm, Futures First, in India and then studied for a Masters in Finance at the London School of Economics.

Mr Sheth joined MHI in June 2014, initially as an intern. In September 2014 he was promoted to Analyst on the Desk, where his job description was that he was an EGB Trader. Mr Sheth’s role involved both analysing Mr Urra’s book and making recommendations and trading on Mr Urra’s book. He also worked on analysis and financial models during this time. Mr Sheth was promoted to Associate in April 2016 but his job description remained that of EGB Trader. He was given his own book to manage at that time, the ETA book - small sizes of EGBs (less than €5m) were traded in this book, which used an auto-quote algorithm and was an active book designed to develop relationships with a select group of clients with whom MHI wished to do larger trades. Mr Sheth managed the risk in this ETA book by hedging cash trades with Futures and monitoring the balance sheet.

Mr Sheth was the junior trader on the EGB Desk; he was the least experienced of all of the traders on that desk, was described as junior by both Mr Hill and Mr Barouti, and this was reflected in his remuneration (his salary was £70,000, and his bonus for the year ended March 2016 was £20,000). As with all of the other traders on the Desk, his supervisor was Mr Urra.

Mr Shivji nevertheless submitted that Mr Sheth had significant financial markets experience by the time he joined MHI in June 2014. The Tribunal agrees that Mr Sheth was well-educated in financial markets by this time and understood risk, and had some practical experience (from his time at Futures First) in managing his own book, but in a very stable market where he had very low risk limits. The Tribunal does not, however, agree that Mr Sheth was, during the Relevant Period, an experienced industry professional. He was the junior member of a team, and still learning and gaining experience.

Mr Sheth left MHI in October 2020.