by Brian Mahany
It’s no secret that we support whistleblowers. We think they are the new American heroes. While its nice to go to the movies and watch Spiderman and the Avengers, the real heroes are the men and women who put their job on the line by standing up to corruption and fraud. That’s why we proudly represent whistleblowers and support whistlewatch.org.
In a Huffington Post story reported on Friday, former Morgan Stanley Smith Barney compliance officer Clifford Jagodzinski claims he was fired after reporting illegal securities trades to the Financial Industry Regulatory Authority (FINRA). Jagodinski claims he was ordered by his bosses to ignore illegal trades. In April of this year he reported those trades and was then fired on April 13th.
The illegal trades made helped individual stockbrokers and the company make money, all at the expense of customers. As is common in many of these lawsuits, Jagodinski had great performance reviews until he blew the whistle. Then suddenly he was given a poor review and terminated. The poor review has made it difficult to find other employment.
Luckily, federal law protects employees against retaliation but it can take years for a case to get to court and sometimes the employer wins.
Notwithstanding the hardship caused by an illegal termination, justice usually prevails and whistleblowers can qualify for a large cash award if their information leads to a recovery. Under the federal false claims act (often called the Lincoln Law or qui tam), whistleblowers can collect up to 30% of what is collected from the defendants plus collect monetary damages if a court finds they were wrongfully retired.
More importantly, by taking a stand against fraud, it is more likely that the company won’t repeat its poor behavior. If everyone took such a stand corporate corruption would quickly end.
Jagodinski says that when fired, Morgan Stanley told him that he would not receive a severance package and health insurance unless he signed a release, confidentiality agreement and a non-disparagement clause. He didn’t. Instead he signed a lawsuit exposing the fraud and efforts at a cover up.
Morgan Stanley denies the allegations of course. Because the complaint was just filed on Wednesday, their answer isn’t yet due in court. According to a statement made to Huffington Post, they claim the suit is without merit.
We hope that if Jagodinski is right, a court really hammers Morgan Stanley. We are sick of seeing large financial institutions bully employees who have the courage to stand up to them. We will definitely be following this story.
If you know of fraud within the workplace, give us a call. We can confidentially tell you if you have a whistleblower claim, whether you may be entitled to a cash award and if you are protected by state or federal whistleblower protection laws. All inquiries are kept in strict confidence.
Mahany & Ertl – Proudly Representing Whistleblowers. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine & Minneapolis, Minnesota. Services available in most jurisdictions.