Financial Services Industry
There are a number of whistleblower laws specific to individuals in the banking, investment banking and financial services industry. These include the Sarbanes-Oxley Act, the Dodd-Frank act and the Consumer Financial Protection Act. Employees in the financial services or securities fields should be weary in navigating the vast and complex securities laws and FINRA rules without an attorney. A single deadline missed; particularly on a claim that the employee wasn’t even aware existed can readily occur. In addition, this industry is notoriously ridden with discrimination issues and other violations of law. Examples of recent cases we successfully handled:
D.B. v. Major N.Y. Investment Bank
Our office represented a highly experienced financial-tech executive, who had a long and established career including senior roles of Head of Advisory and Operations and Group Decision Science. He was also a former senior executive with Goldman Sachs. He was recruited away from his last major N.Y. Investment Banking employer to a premier growing financial technology firm with a $5.5 billion valuation. Unfortunately, about six weeks after he began employment before he could even assemble his team, the new employer terminated him contending that they were going in another direction. Without filing a lawsuit, we successfully negotiated a confidential severance package for our client and reached a settlement within six weeks of our involvement. The settlement included a cash settlement payment and immediate vesting of stock options, potentially worth millions.
H.K.v. Major U.S. Bank
Our office represented Assistant Vice President, Charge Off Operations Manager. In October 2018, our client identified an $850 million error caused by the Bank’s loan charge off macros that caused the Bank to incorrectly claim hundreds of millions of dollars to the Bank’s reported assets. The situation arose because the Bank utilized a spreadsheet “macro” algorithm that calculated loan values, defaults, and asset values. However, that algorithm contained a critical error that caused the loan values and Bank assets to, at times, be dramatically overstated. Our client blew the whistle on that issue. Also, our client blew the whistle on a bank practice in which the bank cherry-picked selective loans and settlement and applied those transactions to make the forecast appear real to both investors and the federal government. However, these accounting methods were mirages and the true mortgage portfolio reflected something very different. After his disclosures, the bank fired our client. After we were retained, we aggressively got involved and told the company that these practices violated the Sarbanes Oxley Act, 18 U.S.C. §1514A which prohibits retaliation against whistleblowers that (1) provide information…regarding any conduct which the employee reasonable believes constitutes a violation of [the securities laws] to “a person with supervisory authority over the employee…” §1514A(a)(1). We successfully negotiated a substantial confidential settlement.