XTX Markets sues Mazars for discrimination over Russian founder
One of the world’s biggest market makers alleges accounting firm is in breach of UK law
Financial trading firm XTX Markets is suing accounting firm Mazars for racial discrimination over its refusal to work for the company because its owner is a Russian citizen.
The London-based trading group is majority owned by billionaire Alexander Gerko, a dual Russian and British citizen, who has lived and worked in the UK since 2006 and is not the subject of any international sanctions, according to a copy of the legal claim seen by the Financial Times
XTX is seeking a declaration that the accounting firm breached the UK Equalities Act by discriminating on grounds of race when it declined to work for the company because its owner has Russian citizenship. It has not asked the court to award damages against Mazars or to force the firm to carry out work for it.
A legal victory for XTX, which has grown into one has one of the world’s leading market-makers, could force accountants, lawyers and public relations firms to review their approach after they rushed to jettison clients with connections to Russia following the country’s invasion of Ukraine.
Many Russians, including those who were not the subject of sanctions, struggled to find advisers in the UK and other jurisdictions as professional services groups faced pressure from employees and the public to refuse to work for Russian clients or companies with any perceived links to the country.
XTX, which competes against the likes of Citadel Securities and Virtu Financial, uses algorithms to trade nearly $300bn a day in assets such as equities, fixed income and futures.
It was founded by Gerko, a Russia-born mathematician who has a stake of at least 75 per cent and serves as joint chief executive. Gerko, who has been publicly critical of the invasion of Ukraine, was listed as the UK’s 89th- richest person by the Sunday Times this year, with estimated wealth of £1.1bn.
XTX said it had committed £40.6mn to charities providing humanitarian relief to Ukraine. In March Gerko wrote on Twitter about Russia’s foreign minister Sergei Lavrov: “Nuremberg is waiting for you.” He had also called for the UK to expand its sanctions list.
Gerko has been a British citizen since 2016, is a permanent resident of the UK and has “no links with, or wealth tied to, Russia”, according to the claim filed in the Central London County Court last month. Neither Gerko nor XTX are included in any sanctions regime, nor are they connected to anybody targeted by economic sanctions, the claim adds.
The case revolves around Mazars’ refusal to provide payroll services to XTX Markets Technologies, part of the XTX Markets group, which reported net profits of more than £660mn in 2021 and employs about 180 people globally, mostly in London.
XTX, which also has offices in New York, Singapore, Paris and Mumbai, alleges that Mazars stood by its decision even after being told that Gerko was not the subject of sanctions and that he had “lived in the UK for over 15 years; his source of wealth comes from the UK; and he has no assets in Russia”.
According to the claim, Mazars partner Erick Gillier wrote in an email to XTX’s general counsel Sunil Samani in May: “I’m perfectly aware of the UK, EU and US sanctions programs, but Mazars as a group, took the decision not to accept any new clients with Russian ownership. This is a global decision and as partners we all need to follow these guidelines.”
XTX alleges that this position was contrary to Mazars’ public policy that it would not serve any companies or individuals who were the subject of sanctions. It claims that Samani told Gillier that Mazars’ stance was discriminatory and asked to speak with the person responsible for its policy but never received a response.
Mazars declined to comment. It has until later this month to respond to the claim.