Whistleblower Takes On Morgan Stanley

A former risk management officer at Morgan Stanley has filed a suit against the company, alleging that the company violated the Dodd-Frank Act, which makes it illegal for companies to retaliate against whistleblowers, by firing him in April. The man, who was employed by the firm’s wealth management division, says his employment was wrongfully terminated because he was a whistleblower.

The man had been employed at the company for six years, according to statements. He is seeking legal fees and $1 million in back pay. He also wants his job back.

The man says he was told to cover up illegal trades between December 2011 and April 2012. Those trades cost customers money, he says, and he was ordered not to investigate or report any of the questionable activity. When he told other firm employees that he wanted to report the illegal trades to the independent securities regulator FINRA, the man was fired.

At first, the man says, his supervisors were happy that he had identified the illegal trades, which were pushed through by the division’s new manager. The trades had begun to generate massive commissions for other workers, though, and the man was quickly dissuaded from investigating further because employees were enjoying their larger paychecks. The man had reportedly even identified more than 80 illegal trades conducted by a single other co-worker. When he approached the man who was trading illegally, the plaintiff says he admitted to the misdeeds.

The man alleges that he has been unable to find another job because his reputation within the industry has been tarnished. The firm has argued that he was fired because of poor performance, but the man says he had never received a negative performance review, except for the one conducted after he blew the whistle.

Although whistleblowers still face uphill battles when dealing with major corporations, the Dodd-Frank Act has provided them with additional shielding by prohibiting company retaliation. Still, Morgan Stanley has a record of strong-arming the courts and plaintiffs to win such civil battles; without well-qualified representation, the man might be in danger of retribution from his former employer.

Source: Huffington Post, “Former Morgan Stanley risk officer Clifford Jagodzinski sues over firing in whistleblower case,” Bonnie Kavoussi, Aug. 2, 2012