Whistleblowers have become a central part of the effort to root out corporate fraud and other wrongdoing since giant scams rocked the financial world and tanked the U.S. economy in 2007-08. As governments equip employees with whistleblower laws and protections that effectively enable them to become the eyes and ears of regulatory authorities, Wall Street and the financial world are pushing back, seeking ways to conduct business as usual.
A whistleblower’s retaliation lawsuit against Swiss bank UBS has reached the Connecticut Supreme Court, where justices will decide whether the financial giant managers are within the law to “discipline” employees who seek to expose alleged wrongdoing.
According to the Hartford Courant, a lawyer for UBS in the case says “employers should be able to punish workers who push for change in their workplace.”
A lawyer for whistleblower Richard Trusz, a former USB employee, argues that “giving employers so much power to stifle their workers’ protests will keep corporate misconduct hidden,” the Courant reported.
UBS fired Mr. Trusz, 58, in 2008 after he repeatedly protested the overvaluation of commercial real estate in UBS funds. He challenged the company’s practices internally for nearly a year before filing a fraud complaint with federal regulators under the Sarbanes-Oxley Act.
In 2009, still waiting for a response to his complaint, Mr. Trusz sued UBS in federal court, alleging the company fired him in retaliation for reporting the alleged fraud.
Now he is waiting for Connecticut Supreme Court justices to decide where Mr. Trusz’s case stands in light of his rights of free speech under the First Amendment, the Connecticut State Constitution, and the U.S. Supreme Court’s 2006 decision in Garcetti v. Ceballos, which set a precedent for the free speech of public employees.
The Connecticut Supreme Court is expected to make a decision before it recesses in August.
Lawyers in Beasley Allen’s Fraud section are working on a variety of whistleblower cases. For more information about whistleblower laws and protections, contact Andrew.Brashier@BeasleyAllen.com, Archie.Grubb@BeasleyAllen.com, or Larry.Golston@BeasleyAllen.com.
Source: The Hartford Courant