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

Sponsored financial news

Featured video

Events

Get creative: How to boost your message to prospects

Communicating with prospects can be difficult. What are some creative ways that you can enhance your messaging? Bob Huntley of Wise Counsel Wealth Management offers some ideas.

Video Spotlight

The Search for Income

Sponsored by PGIM Investments

Recommended Video

Path to growth

Latest news & opinion

T. Rowe Price steps up its game to serve financial advisers

The Baltimore-based mutual fund giant is more aggressively targeting financial advisers with a beefed-up wholesale crew and placement on custodial platforms.

The most important tax changes for 2018

The Internal Revenue Service issued inflation adjustments to more than 50 tax provisions for 2018.

E*Trade acquiring custodian Trust Company of America

Discount broker buying second-tier custodian for $275 million.

Another thousand Dow points higher, and investors yawn

Market milestones keep falling like dominoes, with 51 records broken so far this year.

LPL retains $570 million with super-OSJ deal

Kansas-based nVision Wealth will come under supervision of Chicago-based IHT Wealth Management.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print