The UK arm of the investment bank, Bear Stearns International, claims that when cashing in over $5 million in shares when leaving the bank in 2001, Hans Rudolf Kunz, is liable for taxes that the company paid.
But Mr Kunz denies owing any money and in turn has issued a counter claim and is suing for $202,000.
According to Bear Stearns, Mr Kunz had 93,962 shares that he had accumulated in the company share scheme, he was given these when he resigned.
He then sold his shares raising a total of $5,354,894 but Bear Stearns say that they paid the tax on the sale, which totalled $645,957, despite Mr Kunz's contract stating that he should pay the tax.
But Mr Kunz says that he was never liable to pay taxes on sales of shares because he was a Swiss resident.
He believes that a mistake by Bear Stearns has affected his tax status and wants compensation, but Bear Stearns say the tax bill now stands at $867,000.