Morgan Stanley and BlackRock Settle With Employees

Morgan Stanley HQ

Morgan Stanley Wealth Management has reached a legal settlement with a former Risk Officer who claimed he was fired for reporting a broker at the firm was improperly 'churning' securities.

The Wall Street Journal reports that Clifford Jagodzinski filed suit in August citing federal laws protecting whistleblowers and asked for at least $1m in damages. In his claim, he said he determined that a star broker, Harvey Kadden, was making unnecessary trades to drive up commissions, and that he was fired in April because he urged the firm to report the violations to regulators.

Bloomberg reported in August that Jagodzinski said his superiors at first praised him for reporting the trading, as well as pointing out other activities he thought were improper, then told him to halt his investigations. He was fired days after he said the trading should be disclosed to the Financial Industry Regulatory Authority, according to the complaint.

In the meantime, the news organisation also reports that ex-BlackRock fund manager Michael Lipsky settled a lawsuit in which he accused his former employer of wrongfully withholding information on investment results of funds he managed.

Lipsky, who resigned from New York-based BlackRock in December 2010, sued the company in state Supreme Court in Manhattan in July, accusing it of refusing to provide him with accurate information about the investment results for funds he managed during his employment.

Finally, Bloomberg reports that Dick Bove, the bank analyst whose brokerage, Rochdale Securities, is struggling to survive after an unauthorized $1bn Apple Inc. trade, said he’s been interviewing for a new job.

Bove said he has narrowed his choice to three firms, which he declined to name, and will make a decision by about December 15th. The 71-year-old analyst said he’s giving Daniel Crowley, Rochdale’s chief executive officer, time to seek rescue financing after a loss on the Apple trade decimated the firm’s capital.

Morgan Stanley Settles Whistleblower Suit (subscriber content only)

Ex-Morgan Stanley Risk Officer Sues Bank Over Firing

Ex-BlackRock Fund Manager Lipsky Settles Contract Lawsuit

Rochdale’s Dick Bove Says He’s Considering Three Firms

 

 

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