Ex-Finra employee: I was fired for whistle blowing

Examiner says he found glitch allowing large B-Ds to be over-leveraged

Apr 5, 2013 @ 6:12 pm

finra, broker-dealers, whistle blower
+ Zoom

A former employee of Finra filed a whistle-blower suit in federal court, claiming he was fired after detecting a flaw in the regulator's risk-rating system that allowed large broker-dealers to be over-leveraged.

Joseph Sciddurlo, 58, claimed in the suit filed today that he worked as a principal examiner for the Financial Industry Regulatory Authority Inc. in 2010 when he discovered that the SRO's system allowed large firms to circumvent a Securities and Exchange Commission rule limiting leverage to 15 times net capital.

Sciddurlo was initially “commended for his financial expertise and asked to design a better risk-rating methodology with respect to broker-dealers,” he claimed in a complaint filed in federal court in Manhattan. Later, he was downgraded, placed on probation and fired in May 2011, without a legitimate reason, Sciddurlo said.

In the suit, Sciddurlo claimed Finra illegally discriminated against him on the basis of age and fired him for threatening to disclose the risk-rating flaw to other regulators and to the public. He's seeking at least $25 million in damages.

Michelle Ong, a spokeswoman for Washington-based Finra, had no immediate comment on the suit.

The case is Sciddurlo v. Financial Industry Regulatory Authority, 13-cv-02272, U.S. District Court, Southern District of New York (Manhattan).

-- Bloomberg News --

0
Comments

What do you think?

View comments

Recommended for you

Featured video

Events

The client of the future

Your clients of tomorrow want you to stay ahead of the curve with technology. Some of the industry’s top young advisers and thought leaders explain what they think tomorrow’s clients will need.

Latest news & opinion

Fiduciary advocates press CFP Board for specifics on standards changes

Meanwhile, few brokerages and their trade associations, which blasted the DOL's fiduciary rule in comment letters, are responding to the CFP Board's proposal.

Big gains attract new money to emerging markets, but should investors stay?

An estimated $6.7 billion has flowed into emerging-market stock funds and ETFs so far this year, according to Morningstar.

Attorney blasts Finra after regulator loses insider trading case

Lawyer says it was 'slimy' of Finra to publicize the case while it was still being litigated.

Will Jeffrey Gundlach's Trump-like approach on Twitter work in financial services?

The DoubleLine CEO's attacks on Wall Street Journal reporters is igniting a discussion on what's fair game on social media.

Fidelity wins arb case against wine mogul but earns a rebuke from Finra

In the case of investor Peter Deutsch, Fidelity doesn't have to pay any compensation, but regulator said firm put its interests ahead of his.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print