Swiss banking giant UBS lost its motion to dismiss a whistleblower lawsuit by a former mortgage securities strategist who said UBS fired him for refusing to publish misleading research. A federal judge in Manhattan found that the whistleblower could go forward with his case under the federal whistleblower law known as Dodd-Frank.
UBS argued that a whistleblower is protected only if he reports illegal conduct to the Securities Exchange Commission (SEC). The whistleblower countered that he was protected because he objected to the deceptive research internally to his bosses.
Lawyers for employees hailed the judge’s ruling as a strong disapproval of corporate efforts to dismantle the broad whistleblower protections provided by the Dodd-Frank Act. Congress enacted Dodd-Frank in response to the 2008 banking industry meltdown and the $600 billion of taxpayer money required to save the banks from insolvency.