Regulation And Legislation

Ex-worker sues Vanguard over firing, claiming whistleblower protections

The plaintiff, who had alerted the SEC to alleged lax security over customer data, claims her former employer's actions were "retaliatory."

A former employee of the Vanguard Group has filed a lawsuit claiming she was fired because of her whistleblowing activity.
In the lawsuit, filed last Friday in federal court in Pennsylvania, plaintiff A. Karen Brock, 57, alleges her termination by the mutual-fund giant was “retaliatory,” and violates provisions of the Dodd-Frank financial reform law.
Vanguard spokesman David Hoffman said the firm had no immediate comment on the allegations in the lawsuit.
Ms. Brock is seeking a jury trial to recover unspecified compensatory and punitive damages, in addition to non-economic losses, counsel fees and costs with interest.
In 2015, Ms. Brock disclosed information to the Securities and Exchange Commission about Vanguard’s lax practices and procedures related to client confidentiality and security of customers’ personal information, after the company ignored complaints Ms. Brock had made internally, according to the lawsuit.
Vanguard fired Ms. Brock in August last year, within 17 days of public disclosure of her whistleblowing, claiming Ms. Brock was guilty of unprofessional conduct, according to the lawsuit, Brock v. The Vanguard Group.
“The reasons asserted by Vanguard to justify plaintiff’s discharge are fictions created to avoid the protections given whistleblowers under the federal laws,” the complaint states.
Further, Ms. Brock’s attempts to find work “have been destroyed by Vanguard’s retaliatory conduct,” according to the lawsuit.
Following revelations of the plaintiff’s whistleblowing, Vanguard allegedly posted “false accusations” about Ms. Brock’s unprofessional conduct on the Financial Industry Regulatory Authority Inc.’s public website and a separate site accessible only to those in the securities industry.
“Defendant knew that such a posting would effectively bar plaintiff from obtaining employment in her chosen field and despite diligent efforts she has not received a single offer due to the false and retaliatory postings by the defendant,” the suit claims. “As a result, plaintiff has been wrongfully excluded by the industry.”
Vanguard removed the public post, but the one on industry-only website remains, according to the complaint.