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Ex-FINRA Employee and Whistleblower Files Action Against FINRA

The Doss Firm

On April 5, 2013, former FINRA employee Joseph Sciddurlo filed a whistle-blower suit in federal court, claiming he was fired after detecting a flaw in FINRA’s risk-rating system that allowed large broker-dealers to be over-leveraged.

Sciddurlo claims in the suit that he worked as a principal examiner for FINRA and in 2010 he discovered that FINRA allowed large firms to circumvent a SEC rule limiting leverage to 15 times net capital.

Furthermore, in the suit, Sciddurlo claimed FINRA illegally discriminated against him on the basis of age and fired him for threatening to disclose the risk-rating flaw to other regulators and to the public. He’s seeking at least $25 million in damages.

Sciddurlo claims he was initially “commended for his financial expertise and asked to design a better risk-rating methodology with respect to broker-dealers,” but then he was downgraded, placed on probation and fired in May 2011, without a legitimate reason.

The case is Sciddurlo v. FINRA, 13-cv-02272, in the U.S. District Court, Southern District of New York.

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