New York Securities Lawyer Blog
On September 11, 2013, Saeed Ahmad, who claims to be a credit audit specialist in the Internal Audit Department, filed a whistleblower claim against Morgan Stanley & Co., Inc. (“Morgan Stanley”) alleging that Morgan Stanley retaliated against him after he repeatedly reported to superiors that Morgan Stanley was taking too much risk in providing certain credit facilities worth at least $68 billion since November 2006. See Saeed Ahmad vs. Morgan Stanley & Co., Inc., Index No. 13-cv-6394 (S.D.N.Y.). Ahmad alleges that for numerous years, he voiced concerns over these loans, which ultimately resulted in billions in losses to Morgan Stanley between 2007 and 2009. Further Ahmad claims that Morgan Stanley lied to its outside auditors, Deloitte & Touche, LLP, by misrepresenting the adequacy of the firm’s risk controls. Ahmad also alleges that in order to fulfill his duties as an auditor, he reported his beliefs to his superiors, and in response was bullied and harassed which made him unable to continue working. According to Ahmad’s complaint, after voicing his concerns to senior Morgan Stanley officials, he experienced so much stress and illness that he missed work for an entire week, which pursuant to Morgan Stanley policy, placed Ahmad on Short-Term Disability. Then, after six months of Short-Term Disability, he was placed on Long-Term Disability, which ultimately resulted in a loss of his 401(k) contributions and ultimately in an alleged loss of compensation. The complaint alleges that Morgan Stanley violated the Securities Exchange Act of 1934, Rule 10b-5, when it misrepresented the adequacy of its risk control to outside auditors. Further, the complaint alleged that Morgan Stanley violated 15 U.S.C. ยง78u-6(h)(1): Dodd-Frank Securities Whistleblower Incentives and Protection – Prohibition Against Retaliation. As a result of his Whistleblower allegations, Ahmad requested the following relief: (1) reinstatement with the same seniority status [Ahmad] would have had but for the discrimination; (2) two times the amount of back-pay owed, with interest; (3) compensation for litigation costs, expert witness fees, and reasonable attorneys’ fees. Further, Ahmad requested compensatory damages, punitive damages, attorneys’ fees, and costs for his emotional distress. In response, Morgan Stanley will need to either file an answer or motion to dismiss shortly.
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