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Former broker files whistle-Blower suit following fraud investigation

by on
in Leaders & Managers,Management Training

Timothy Flynn, a former senior vice president for UBS Financial Services, has filed a lawsuit claiming the Wall Street firm retaliated against him for cooperating with a Massachusetts securities fraud investigation.

Flynn says he was dismayed when $30 million in auction-rate securities he had sold to Massachusetts towns and cities and the Massachusetts Turnpike Authority became worthless in February. During a meeting with the Massachusetts attorney general’s office in April, Flynn told investigators that UBS had led its brokers to believe the securities were as safe as cash.

Immediately after Flynn spoke to investigators, a UBS lawyer settled the case, agreeing to repay $37 million to 17 municipal clients in Massachusetts.

After the settlement, Flynn says management locked him out of his Manhattan office and told him not to communicate with his Massachusetts clients. Later, the lawsuit claims, the company seized Flynn’s hard drive and ultimately forced him to resign.

Flynn calls the debacle a “fraud perpetrated upon not only UBS employees but also UBS clients.”

A UBS spokesman says Flynn “made the decision to resign of his own volition” and indicated the firm would defend itself vigorously.

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