ABN Amro is facing the prospect of legal action this week after withdrawing formal job offers to two former Commerzbank traders.
Lawyers representing the traders wrote to Rijkman Groenink, chairman of ABN Amro, seeking an explanation and could launch legal proceedings as early as this week.
The saga began more than three months ago, when ABN Amro is understood to have initiated negotiations with James Keene, David McCreadie and five of their colleagues who formed Commerzbank's special situations trading team. Last month, the Dutch bank sent employment contracts to Keene and McCreadie, offering them positions in the expanding cross-products trading team.
However, two days after receiving signed contracts from Keene and McCreadie, ABN Amro's human resources department told them it was withdrawing the offers.
Accounts differ over the reason for ABN Amro's apparent change of heart. Some sources within the bank insist the offers were withdrawn because of unsatisfactory references.
A spokesman for ABN Amro said: "We do not comment on discussions concerning individuals. Our employment practices are industry standard. We have heard nothing about legal action."
ABN Amro's official version is contested by the traders and other ABN Amro insiders, who suggested the apparent U-turn came after the recruitment last month of former Goldman Sachs trader Raahil Bengali to an almost identical role to the one offered to Keene and McCreadie.
Bengali, who was hired as head of risk and cross-product trading shortly before Keene received his contract, was said to be furious at the imminent arrival of the former Commerzbank traders.
However, one source close to ABN Amro added: "By effectively hiring two bankers in the same role, ABN Amro would have opened two books trading in exactly the same areas with the firm's money. This is a cock-up rather than a conspiracy."
A bank can withdraw a job offer on the grounds of unsatisfactory references without having to make a financial settlement.
Neither McCreadie nor Keene could be reached for comment.