A financial planner was terminated from his position after coming forward with concerns regarding possible securities law violations at his firm. A judge has ruled that the whistleblower may proceed with a claim under the Dodd-Frank Wall Street Reform and Consumer Protection Act. The judge rejected the company’s contention that the whistleblower does not fit the statutory definition of a Dodd-Frank whistleblower because he complained to the Securities and Exchange Commission after his employment was terminated. California whistleblower and securities attorneys say that whistleblowers are an important tool in the fight against financial fraud.
In this case, the whistleblower was a financial planner who worked for New England Investment & Retirement Group, Inc. The company offers many financial products for clients, among them are written reports analyzing securities traded on the national securities exchanges. New England Investment & Retirement Group, Inc. is governed by the 1940 Investment Advisors Act. The Investment Advisors Act requires that all registered investment companies must have a compliance official on staff who is responsible for Investment Advisors Act compliance. California whistleblower and securities attorneys remind the public that compliance departments are the first step in fraud prevention.
The whistleblower in this case alleged that the firm he worked for was providing misleading investment reports to current and potential clients. He made a list detailing the alleged infractions. The whistleblower then gave the report to the compliance department at the firm. The compliance department then conducted their own separate investigation. Subsequently, in August of 2010, the whistleblower was terminated from his position at the firm. The reason he was given for his termination was that he had allegedly e-mailed confidential New England Investment & Retirement Group, Inc. information to his private e-mail account.
After the whistleblower was terminated from his employment at New England Investment & Retirement Group, Inc., he went to the Securities and Exchange Commission and volunteered to help with an investigation of his former employer. The Securities and Exchange Commission performed an investigation and assessed New England Investment & Retirement Group, Inc. $200,000 in civil penalties for knowingly violating securities regulations. The whistleblower then sued New England Investment & Retirement Group, Inc. for whistleblower retaliation, alleging that he was terminated because he came forward with concerns. He claims that his termination was a violation of the Dodd-Frank Act whistleblower provisions. California whistleblower and securities attorneys remind the public that whistleblowers help to save taxpayers millions of dollars every year.
In this case, the court ruled that the amended complaint was adequate and that the retaliation claim under Dodd-Frank would be allowed. The defendant’s motion for judgment on the pleadings was denied. The court adopted the Securities and Exchange Commission’s interpretation of Dodd-Frank.
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