Weinberger said he was "pleased with the outcome and relieved that this matter is over."

Weinberger, a trader, whose grandmother died at Auschwitz, was told to wear the uniform in May of 2000 after he came to work late. He also complained of having been called "Yiddo" and "Jew boy" by his manager and a colleague.

He said he was moved from his department to another one, with a pay cut, shortly after the Nazi uniform incident.

He resigned, alleging racial discrimination and unfair dismissal.

Tullet & Tokyo denied the charge of racial discrimination, but admitted that the incident involving the uniform took place and that it had been "wholly inappropriate."

The company said the atmosphere in Weinberger's department involved "banter, including strong language, name calling and references to personal characteristics or actual (or alleged) habits, much of which was in bad taste."

The firm said that being made to wear costumes was a regular punishment for being late, and that the choice of costume often reflected an employee's ethnic background.

It said that the practice has been ended and that it "has taken positive steps to ensure that such an incident is not allowed to happen again."

The company denied that the Nazi uniform incident amounted to racial discrimination because Weinberger was not singled out for abuse based on his ethnic origin.

Weinberger's lawyer, Makbool Javaid, dismissed the defense as "ridiculous."

He said in an interview it was "extraordinary that anyone would think it is funny in this day and age to ask someone Jewish to wear a Nazi uniform."

Before the settlement, the company offered to pay $67,500 to a Jewish charity "to emphasize how inappropriate was this behavior" if Weinberger dropped the case.

The settlement did not involve any donation to charity, a source close to the case said.

The Community Security Trust, which monitors anti-Semitic incidents in Britain, said the matter sounded like the sort of "infantile behavior that is common" in London brokerage firms, which are often dominated by rowdy, wealthy young men.

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