Joseph Sciddurlo, a financial examiner for the Financial Industry Regulatory Authority (FINRA) is claiming that he was fired for detecting a loophole that helps large broker-dealers duck SEC rules and undercapitalize themselves.
Sciddurlo starting working for FINRA as a financial examiner in May 2007, and just a year later was promoted to a Level 47 principal examiner. Sciddurlo claims he received high performance ratings his first 2 years on the job, until he “detected a flaw in the FINRA system, which allowed larger broker dealers to be overleveraged.”
That flaw allegedly allowed broker-dealers to avoid a SEC rule, which prohibits them from leveraging 15 times more than their net capital.
Sciddurlo says that he made the discovery while working on a project, at the urging of bosses who sought a better risk-rating methodology for broker dealers.
For this, he claims, his bosses downgraded him “suddenly and without justification” from a Level 4 rating of “high contributor” to a Level 3, “solid contributor.”
“Upon being downgraded to a “solid contributor,” he requested to be transferred to the Cycle Department at FINRA, since he had taken the initiative to pass the ‘Securities Fraud’ course offered by the Association of Certified Fraud Examiners which makes Examiners more proficient in detecting Ponzi schemes,” the complaint states.
“The plaintiff was without justification denied a transfer to the Cycle Department, even though FINRA Human Resource Department had assured him that as a ‘Solid Contributor’ he was allowed to transfer positions.
“In early 2011, the plaintiff was also warned by his superiors to stop using Cash Flow Analysis’ even though his ‘Cash Flow Analysis’ correctly predicted the demise of a large broker-dealer in 2008.”
Sciddurlo says in his complaint: “In April of 2011, and without any legitimate basis, the plaintiff was placed on probation, despite his excellent performance, evaluations and years of service to FINRA.” He was then fired on May 17, 2011, just one year before his pension vested.
Sciddurlo demands $25 million in punitive damages for age discrimination, wrongful termination, violation Labor Laws and whistle-blower protections under the Dodd-Frank Act.
If you have suffered discrimination or wrongful termination, please contact California Employment Attorney, Todd M. Friedman for a free consultation.
