Published May 21, 2013
NEW YORK – UBS AG lost a bid Tuesday to dismiss a whistle-blower lawsuit by a former commercial mortgage-backed securities strategist who said he was fired for refusing to publish misleading research reports.
U.S. District Judge Jesse Furman in Manhattan found that Trevor Murray, who was fired in February 2012, could move forward with his case. Murray alleges that after he complained to superiors, the Swiss bank retaliated against him in violation of the Dodd-Frank Act.
The ruling was one of a handful to date to address the scope of the whistleblower provisions of Dodd-Frank, the 2010 law enacted in response to the U.S. financial crisis.
UBS argued the Dodd-Frank whistleblower provisions did not apply to Murray as he only complained to people at UBS and not the U.S. Securities and Exchange Commission.
But Furman cited rules adopted by the SEC in 2011 interpreting the Dodd-Frank law as extending the law's anti-retaliation provisions to protect individuals whose disclosures were made under the earlier Sarbanes-Oxley Act, regardless of if the person complained to the SEC itself.
"Applying this analysis here, the Court concludes that deference to the SEC's rule is warranted," Furman said.
Robert Stulberg, a lawyer for Murray at Broach & Stulberg, said the ruling marked the fifth time a U.S. court had extended Dodd-Frank's whistleblower provisions to cover employees who only complain internally.
"The decision is a definitive rebuke to repeated and concerted efforts to dismantle broad protections for whistle-blowers that Congress provided in Dodd-Frank," Stulberg said.
Representatives for UBS did not immediately respond to a request for comment.
Murray was a senior commercial mortgage-backed securities strategies from May 2011 to February 2012.
In a lawsuit filed in August, he alleged that UBS engaged in a "concerted, extended effort" to influence him to bias his research to support the bank's commercial mortgage-backed securities trading and loan activities.
Murray said he complained to superiors. But he was fired last year, despite recently receiving "another spotless review" for his performance.
The lawsuit seeks to have Murray reinstated into his position and an award for backpay and the costs of the litigation.
The case is Murray v. UBS Securities, LLC, et al, U.S. District Court, Southern District of New York, No. 12-05914.
(Reporting by Nate Raymond in New York; Editing by Lisa Shumaker)