Former Royal Bank of Canada chief financial officer Nadine Ahn is suing the bank for nearly $50-million, claiming that RBC wrongfully terminated her employment four months ago after an internal investigation allegedly found she had an undisclosed personal relationship with a colleague that led to preferential treatment.
The lawsuit that Ms. Ahn, 53, filed with the Ontario Superior Court of Justice claims that “RBC’s allegations are patently false,” and that the way it broadcast her termination in a news release “caused her devastating, worldwide reputational harm, and impairs her ability to earn a living.”
Former Royal Bank of Canada CFO Nadine AhnSupplied
RBC, which is Canada’s largest bank, shocked the country’s financial sector when it abruptly terminated her employment late on a Friday evening in April. The bank said that after receiving a complaint to an internal tip line, it hired outside legal counsel to investigate and “found evidence that, in contravention of the RBC Code of Conduct, Ms. Ahn was in an undisclosed close personal relationship with another employee which led to preferential treatment of the employee including promotion and compensation increases.”
The bank did not name the other executive, but The Globe and Mail reported that it was Ken Mason, a vice-president and head of capital and term funding.
RBC terminated Ms. Ahn and Mr. Mason on the same Friday in April. Mr. Mason, who was 57 at the time, has also filed a lawsuit seeking nearly $22-million in pay and damages from the bank, claiming he was “improperly and unfairly” fired and that a long-standing “friendship and professional working relationship was mischaracterized” by the bank.
“The clear insinuation of the RBC Statement was that [Mr. Mason] and Ahn had had an extramarital affair and that Ken received career advancement and financial benefits as a result. This insinuation was false and defamatory,” his lawyers say in court filings.
Ms. Ahn and Mr. Mason are each married with children, according to the court filings.
The bank said in a statement that the two executives’ claims are without merit and plans to “vigorously defend against them in court.”
“We conducted a thorough review with an investigation by outside legal counsel and the facts are very clear that there was a significant breach of our Code of Conduct based on the irrefutable evidence collected during the investigation,” bank spokesperson Gillian McArdle said in an e-mail.
She said RBC holds employees, especially senior leaders, “to high ethical standards and a CFO’s integrity must be beyond reproach.”
Lawyers representing Ms. Ahn and Mr. Mason did not respond to requests for comment.
Bloomberg News was first to report the existence of the lawsuits.
Ms. Ahn’s sudden firing halted her ascent to the top ranks of RBC, where she was one of the most senior women in banking and positioned to be a candidate to succeed chief executive officer Dave McKay. In a court filing, her lawyers say she “was identified by RBC as a possible successor for the CEO position.” In the 2023 fiscal year, the bank paid her more than $4-million in direct compensation.
As CFO, Ms. Ahn had control over compensation and promotions in her division, including treasury, which is the unit responsible for the bank’s liquidity and financial risks. In her lawsuit, she “denies providing preferential treatment to Mr. Mason.”
Ms. Ahn said she and Mr. Mason became friends around 2013, and claims she was not required to disclose such a friendship under RBC’s workplace policies. “Her friendship with Mr. Mason was not concealed from RBC in any way,” her lawyers said.
“Ms. Ahn pleads that RBC’s actions were in extreme bad faith and defamatory,” the lawsuit said.
Both executives claim in court filings that the bank “ambushed” them when they were summoned to meetings on April 5 at short notice – Ms. Ahn in a text from the CEO, Mr. McKay, and Mr. Mason through an invitation from chief risk officer Graeme Hepworth. Neither Mr. McKay nor Mr. Hepworth were present at the meetings and Ms. Ahn and Mr. Mason say they had no opportunity to prepare or to seek advice from a lawyer.
Once there, Ms. Ahn and Mr. Mason say they were shown documents and questioned for about two hours each by external lawyers whom Mr. Mason said were from the firm Norton Rose Fulbright LLP, with a representative from RBC’s employee relations group present. Ms. Ahn said RBC seized her laptop as well as her work and personal cellphones at the start of the meeting.
The two former executives also alleged that RBC’s allegations about code of conduct violations were coloured by gender-based stereotyping. Mr. Mason, in particular, claimed RBC “has been an environment for ‘old boys club’ cronyism” and that close relationships between pairs of men or pairs of women at the bank have not been similarly scrutinized.
The day Ms. Ahn was terminated by RBC was the 25th anniversary of her start date with the bank. Mr. Mason worked at RBC for more than 26 years.
With reports from Stefanie Marotta and Tim Kiladze