IN THE UNITED STATES DISTRICT COURT FO&-~~f r:n
EASTERN DISTRICT OF TENNESSEE
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at Knoxville
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JOHN S. VERBLE
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Plaintiff
Civil Action No.:
v.
I'S- CV- J-4
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Judge3:
MORGAN STANLEY SMITH BARNEY, LLC
JURY TRIAL DEMANDED
and
MORGAN STANLEY & CO., INC.
Defendants
COMPLAINT
Now into Court through undersigned counsel comes John Stanton Verble who
brings this action for unlawful and retaliatory discharge, harassment and discrimination
against Morgan Stanley Smith Barney, LLC and Morgan Stanley & Co. Inc., all arising
out of Plaintiffs participation in enforcement efforts by the Federal Government under
31 U.S.C. §§ 3721 et seq., 15 U.S.C §§ 78a et seq., and 18 U.S.C. §§1341 et seq. and for
the same unlawful and retaliatory discharge, ongoing harassment and ongoing
discrimination pursuant to Tennessee common and statutory law, to-wit, Tenn. Code Ann.
§ 50-1-304 related to a firing and discrimination done maliciously when the Defendants
were motivated by ill will, hatred, or personal spite, and for physical injury arising
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naturally from the intentional and/or negligent infliction of emotional distress pursuant to
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Tennessee common law.
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JURISDICTION AND VENUE
1. Jurisdiction of this Court is based upon: (1) 31 U.S.C. § 3730(h) which protects
employees who inform Federal authorities of wrongdoing in violation of 31
U.S.C. §3729; (2) 15 USCS § 78u-6(h) which protects employees who inform
Federal authorities of wrongdoing in the securities industry; and, (3) 18 U.S.C.
§1514A which protects employees who inform Federal authorities concerning
violations of the Sarbanes Oxley Act involving the Act's prohibited wrongdoing
in publicly traded companies. Venue arises from 28 U.S.C. § 1391.
2. Jurisdiction over Plaintiffs State law claims and claims for punitive damages
arises pursuant to 28
uses
§ 1367 conferring supplemental jurisdiction over
state law claims related to federal causes of action.
3. Both Defendants do business in the Eastern District of Tennessee and Morgan
Stanley Smith Barney, LLC maintains a physical office within the Eastern
District at Landmark Center, 1111 North Northshore Drive, Knoxville, TN
37919. Morgan Stanley Smith Barney, LLC is a wholly owned subsidiary of
Morgan Stanley & Co., Inc.
4. Notwithstanding FINRA Rule 13200 and any pre-dispute arbitration agreement
in Plaintiffs contract of employment, 18 USCS § l 5 l 4A( e)(2) as well as FINRA
Rule 13201 (b) prohibit the enforcement of FINRA arbitration rules or predispute arbitration contract clauses in whistleblower actions where violations by
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the defendants of provisions of the Sarbanes Oxley Act are implicated.
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PARTIES
5. Plaintiff, John S. Verble, is a resident of Tennessee who lives in Lenoir City,
Roane County, TN 37771.
6. Defendant Morgan Stanley Smith Barney, LLC (hereinafter "MSSB") is a
wholly owned subsidiary of Defendant Morgan Stanley & Co., Inc. and MSSB is
the former employer of John S. Verble.
Both MSSB's agent for service of
process and Morgan Stanley & Co., Inc.'s agent for service of process in
Tennessee is CT Corporation, 800 S. Gay Street, Suite 2021, Knoxville, TN
37929-9710.
7. Defendant Morgan Stanley & Co. Inc. is a publicly traded company listed on the
New York Stock Exchange and is headquartered at 1585 Broadway, New York,
NY 10036. Morgan Stanley & Co., Inc. exerts such control and management
over MSSB as to have a unity of interest with MSSB: representatives of Morgan
Stanley & Co., Inc. appeared in internal MSSB proceedings in this case
interchangeably with representatives of MSSB.
FACTS
8. Plaintiff John Verble is a graduate in science from Tennessee Technological
University and holds a Ph.D. in psychology from the University of Tennessee at
Knoxville, TN.
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9. On or about 13 November 2006 Plaintiff entered into an employment agreement
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with the branch office of Defendant MSSB at Landmark Center, 1111 North
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Northshore Drive, Knoxville, TN 37919 to be a financial advisor.
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10. In Plaintiffs capacity as a financial adviser, Plaintiff earned, in his last year of
employment, $359,859 plus health insurance benefits and approximately
$11,000 in a 401(k) contribution.
11. Between November, 2006 and March, 2010 Plaintiff became aware of numerous
criminal activities on the part of clients of MSSB as well as illegal activities that
violated the Sarbanes Oxley Act and other federal statutes on the part of MSSB
itself, which activities were of a serious nature and which activities caused
Plaintiff high anxiety and a great moral concern.
12. The criminal activities observed by Plaintiff involved, without limitation: (1)
fraud upon the government of the United States; (2) fraud and wrongdoing in the
securities industry; and, (3) fraud and wrongdoing in publicly traded companies.
13. In or about November, 2012 and again in or about March, 2013 Brian
Massengill, a colleague of Plaintiff at Morgan Stanley, observed Plaintiff getting
into a black sedan with tinted windows accompanied by what appeared to be
Federal agents. Mr. Massengill asked Plaintiff in November, 2012 whether he
was working with the FBI and Plaintiff averred to Mr. Massengill that he was
working with the staff of Congressman John Duncan.
14.As a result of certain newspaper stories that appeared locally and the second
sighting by Mr. Massengill of Plaintiff in the black sedan with apparent FBI
agents, on or about 7 May 2013, executives at MSSB called Plaintiff into a
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conference room where four other MSSB persons were present, including a
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lawyer from Defendant Morgan Stanley & Co., Inc., namely Daniel Derechin,
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Esq., vice president of legal and compliance, and thereupon Mr. Derechin asked
Plaintiff a series of questions concerning whether Plaintiff was cooperating with
the FBI.
15. Among other questions, Plaintiff was asked whether he "was wearing a wire" in
the conference room at the time of the interview, and was further questioned
about any and all relationships he had with the FBI.
16. Plaintiff did not discuss any details of his involvement in any investigation or
prosecution, but Plaintiffs evasive answers to the Defendants' questioning
clearly signaled to the MSSB and Morgan Stanley management personnel in the
room that he was working with Federal and/or State authorities.
17. Because it became apparent at the meeting described in paragraph 14 that
Plaintiff was working with the FBI, the branch manager, David Elias, told
Plaintiff "I am going to take you outside and whip your ass!"
18. Plaintiff had been instructed by the FBI to avoid all physical confrontations, and
pursuant to those instructions, upon being threatened, Plaintiff got up and left the
conference room.
19. Because the confrontation described in Paragraph 17 occurred at the end of the
workday, Plaintiff immediately left the branch building, drove approximately
one mile, and then telephoned the Knoxville FBI office and related the incident
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and the physical threat to the FBI.
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20. Plaintiffs collaboration with the FBI and his work as a confidential source
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resulted in, by way of example and not by way of limitation, the following
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proceedings, which are here stated upon information and belief and subject to
confirmation during discovery:
Ten former employees of Jimmy Haslam's family business, Pilot Flying J, pied guilty to
fraud-related charges involving a fuel rebate scheme. Here is a list of those convicted and
a summary of their pleas:
Brian Mosher
Job: National director of sales, also had worked as regional sales manager
Mr. Mosher was responsible for defrauding between 50 and 250 customers out of rebates,
according to Mr. Mosher's plea agreement for sentencing purposes. The plea agreement
puts the loss that Mr. Mosher is responsible for at between $7 million and $20 million.
Mr. Mosher also helped teach the scheme to sales people at a company sales seminar. In
documents, authorities said Mosher once told staffers that "some (trucking companies)
don't know what a spreadsheet is. I'm not kiddin'. So again, my point is this: Know your
customer .... If the guy's sophisticated and he truly has gone out and gotten deals from
other competitors and he's getting daily prices from us, don't jack his discounts, 'cause
he's gonna know, OK?" Mr. Mosher pied guilty in January, 2013.
Christopher Andrews
Job: Regional sales manager
Mr. Andrews told investigators that the scheme "had gone on for quite some time prior to
his employment (in 2010), based on how openly it was discussed," according to Mr.
Andrews' plea agreement. He said he refused to mention the scheme in emails at work
because he knew it was "shady," the plea agreement said.
James Stinnett
Job: Regional sales manager, later promoted to assist senior management
Mr. Stinnett bilked unsuspecting trucking companies from 2008 through 2011 as a
regional sales manager in the Southeast. He was later promoted to a position to assist
senior management in handling sales issues. In a meeting October 25, 2012, Mr. Stinnett
discussed the scheme with Pilot Flying J officials, according to his plea agreement. He
offered "his mutual agreement to defraud certain customers by deceptively withholding
the full amount of the agreed upon (rebate) to those customers," prosecutors said in the
plea agreement. On April 15, 2013, when authorities raided the offices of Pilot Flying J,
Stinnett told investigators that he knew his actions were dishonest, that he did them out of
loyalty to Pilot Flying J and that senior management of the company knew about the
scheme. He pied guilty in June, 2013.
Arnold Ralenkotter
Job: Regional sales director
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Mr. Ralenkotter played a key role in defrauding customers for years. He had been in Pilot
Flying J's sales division for 10 years, and he agreed to join others in fleecing customers in
the rebate scheme, according to his plea agreement. Mr. Ralenkotter once bragged to
fellow employees about how he lied to a trucking company that was thinking of dropping
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Pilot Flying J as its fuel choice. Mr. Ralenkotter told the company that he was prepared to
offer a much better deal to keep the customer. The plea agreement said Mr. Ralenkotter
knew he would never give the customer such a deal. Mr. Ralenkotter pied guilty in May,
2013.
Scott Fenwick
Job: Regional sales manager
Mr. Fenwick took part in the scheme for about five years. He told an account
representative how much to defraud certain trucking companies on a monthly basis, and
the account representative would then send reduced checks to the businesses. On Nov.
19, 2012, Mr. Fenwick told a group of Pilot Flying J sales officials that if he ever got
caught cheating by a customer, he would blame it on sales staff or a computer glitch. Mr.
Fenwick pied guilty in July, 2013.
Kevin Clark
Job: Regional sales manager
Mr. Clark agreed to work on the rebate scheme with others at Pilot for years. He would
fraudulently reduce the customers' negotiated fuel discounts by 2 to 3 cents a gallon each
month. Mr. Clark admitted to a co-worker in November, 2012 that he defrauded
customers, including three trucking companies in the Great Plains region. He pied guilty
in June, 2013.
Janet Welch
Job: Senior regional account representative
Ms. Welch worked at Pilot Flying J since 1998. She took part in the scheme since 2008,
according to her plea agreement. Ms. Welch knew about the scheme and sent "numerous
deceptively reduced" rebate checks to a customer in New Jersey. She, like others,
participated in a sales staff session in 2012 on how to fleece customers. Prosecutors, for
sentencing purposes, set the level of loss attributed to Welch at between $400,000 and $1
million. Prosecutors alleged that Ms. Welch defrauded between 10 and 50 customers. Ms.
Welch pied guilty in July, 2013.
Holly Radford
Job: Regional account representative
Ms. Radford took part in the scheme to defraud by agreeing to deceptively reduce the
monthly rebates of trucking companies, based on instructions from sales people. When
Ms. Radford spoke with federal agents on the day of the raids, she admitted that she knew
that what she was doing was wrong but that she kept doing it, as she was instructed and
taught. For sentencing purposes, prosecutors said, she was responsible for a loss of
between $200,000 and $400,000. Ms. Radford pied guilty in June, 2013.
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Lexie Holden
Job: Account representative for Brian Mosher and others
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Ms. Holden actively took part in the scheme, helping to fleece between 10 and 50
customers. For sentencing purposes, prosecutors said, she helped defraud between
$400,000 to $1 million from trucking companies. Ms. Holden attended a sales staff
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seminar where Mr. Mosher taught the staff how to bilk companies. Ms. Holden met with
federal agents and cooperated soon after the raids. Ms. Holden pied guilty in January,
2013.
Ashley Judd
Job: Regional account representative
Ms. Judd worked with sales staff to carry out the scheme, "albeit with reluctance,"
prosecutors said in Ms. Judd's plea agreement. Ms. Judd had worked at Pilot Flying J as
an intern in high school and college. Prosecutors said Ms. Judd caused $200,000 in losses
to Pilot Flying J customers. On the day of the raids, Ms. Judd told federal agents about
her handwritten spreadsheets that indicated what trucking companies received and what
they were supposed to receive in rebates, according to her plea agreement. "Employees in
Pilot's direct sales division have been routinely taking advantage of the over-the-road
trucking company customers who lacked fuel knowledge by reducing customers' monthly
rebates without their knowledge since Judd began working for Pilot in 2009," Judd's plea
agreement said. The document added that there was a "culture of fraud-acceptance within
Pilot's sales division." Ms. Judd pied guilty in May, 2013.
21. On or about 8 May 2013, the day following the physical threat to Plaintiff by
David Elias as set forth in paragraph 17, Mr. Elias telephoned Plaintiff and told
him that he was being placed on "temporary leave with pay" and that he was not
to come into the office and not to contact Plaintiffs clients. Plaintiff was
informed that Mr. Elias had changed all the locks. Plaintiff remained in that
status until Plaintiff was fired in June, 2013.
22. On 17 June 2013, as a direct result of Plaintiffs involvement in assisting the FBI
to investigate violations of31 U.S.C. § 3729, 15 U.S.C §§ 78a et seq., 15 U.S.C.
§ 7201 et seq., and 15 USCS § 78u-6, Plaintiff was retaliated against,
discriminated against and illegally discharged from his position in violation of
numerous federal statutes including by way of example 31 U.S.C. § 3730(h).
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23. Many of the persons who pled guilty to federal charges directly related to
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Plaintiffs work with the FBI were Morgan Stanley customers and Plaintiffs
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information about wrongdoing that was transmitted to the FBI involved both
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employees of MSSB itself and customers of MSSB who admitted their
wrongdoing to Plaintiff and others on MSSB premises and off MSSB premises.
24. 15 U.S.C. §78u-6 provides as follows:
(h) Protection of whistleblowers.
( 1) Prohibition against retaliation.
(A) In general. No employer may discharge, demote, suspend, threaten, harass, directly or
indirectly, or in any other manner discriminate against, a whistleblower in the terms and
conditions of employment because of any lawful act done by the whistleblower-- ...
(iii) in making disclosures that are required or protected under the Sarbanes-Oxley Act of
2002 (15 U.S.C. 7201 et seq.), the Securities Exchange Act of 1934 (15 U.S.C. 78a et
seq.), including section lOA(m) of such Act (15 U.S.C. 78f(m)), section 1513(e) of title
18, United States Code, and any other law, rule, or regulation subject to the jurisdiction
of the Commission.
(B) Enforcement.
(i) Cause of action. An individual who alleges discharge or other discrimination in
violation of subparagraph (A) may bring an action under this subsection in the
appropriate district court of the United States for the relief provided in subparagraph (C).
25. MSSB 's retaliation against Plaintiff was for: (i) "making disclosures that are
required or protected under the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7201 et
seq.)"; (ii) making related disclosures concerning MSSB clients, which
disclosures were acquired by virtue of Plaintiffs position at MSSB; and (iii)
making related disclosures concerning MSSB employees themselves.
26. Defendants' actions in this regard are part and parcel of Defendants' standard
way of doing business because in 2012 a senior financial advisor with Morgan
Stanley in a major Southern city told the plaintiff that a team of financial
advisors knew of the fraud with Enron but would not tell Federal authorities
because of fear of losing their jobs and further retribution from Morgan Stanley.
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"Dr. John, I don't know why you are asking about this or where you are going
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with it. If you ever know about anything (insider trading, fraud, info about
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CDO's) you better keep your mouth shut. Morgan Stanley will ruin you and you
will never be able to get another job. Keep your mouth shut!"
27. The retaliation and discrimination against Plaintiff is on-going and MSSB, in
furtherance of the "pretext" under which Plaintiff was fired, is currently holding
hostage $242,471 of Plaintiffs money that was in an MSSB brokerage account.
28. In the course of the FBI investigation into numerous related illegal activities,
Plaintiff wore a wire and uncovered insider trading activities at MSSB, all in
violation of, without limitation, the Sarbanes Oxley Act, 15 U.S.C. § 7201 et
seq.
29. In addition to Plaintiffs work with the FBI, Plaintiff has also worked with the
Securities and Exchange Commission to uncover, without limitation, insider
trading and Sarbanes Oxley Act violations.
30. Specifically, Plaintiff uncovered insider trading among members of MSSB's
Knoxville office and their clients with regard to Miller Energy stock, all in
violation of § 1O(b) of the Securities and Exchange Act of 1934 and Rule I Ob-5
(17 C.F .R. 240. IOb-5) of the implementing regulation, all of which constituted
fraud in a publicly traded company.
31. Plaintiff also discovered manipulation of the books of Miller Energy, including
by way of example, the Company's borrowing money without disclosing said
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loan to stockholders or the SEC.
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32. Management of MSSB suspected that Plaintiff was also involved in relating
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information concerning insider trading on the part of MSSB personnel and
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MSSB personnel's complicity with employees of other publicly traded
companies in misrepresenting financial information to Federal regulators and
manipulating stock prices. Thus, Plaintiffs firing was a violation of 15 USCS §
78u-6(h) and 18 U.S.C. §1514A.
33. Immediately after David Elias telephoned Plaintiff and informed him that he was
on administrative leave and not to contact his clients, upon information and
belief and subject to confirmation during discovery, Mr. Elias gave instructions
to Messrs. Massengill, Meyers and others to contact and visit Plaintiffs clients.
The other financial advisors were instructed by Mr. Elias to do everything that
they could do to develop a relationship with Plaintiffs clients and to inform the
clients that "Dr. John is in trouble." In this last regard, Mr. John Meyers said to
some of Plaintiffs clients: "We fired Dr. John."
34. Management personnel and others at MSSB slandered Plaintiff in his trade or
business to his former clients and others, thus impeding Plaintiffs ability to earn
a living and impairing Plaintifrs ability to entice former satisfied clients to join
him at his new place of employment.
35.Representative slanderous statements by MSSB employees in the course of their
employment are, without limitation, as follows:
David Elias: "John Verble is mentally ill. He carries a gun. We are lucky we
weren't shot."
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John Myers: "Dr. John is crazy! He had a nervous breakdown. He is out of
the business for good! He was doing outside activity. Hopefully he wasn't
involved with the FBI."
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Andy Venable: "He is out of business for good. He is going to work in the
sports industry or at a university. John Myers said he is suicidal."
Brian Massengill: "Dr. John is no longer in the business. In respect of his
privacy I'm not going to say why he left. It is understood that he had outside
interest and had a nervous breakdown. He won't be back. There was
something weird going on with him. I saw him getting into sedans with dark
tinted windows several times."
John Lenoir: "John Verble was fired because he embezzled money from
clients."
Scott Sexton: "Dr. John no longer works at Morgan Stanley. The doctor has
mental problems. You can talk to our manager. He told us that Dr. John is
dangerous, he carries a gun and might shoot one of us. He won't be working
in the business again."
Janet Gavlick: "John Verble is crazy! Don't hire him!"
Randy Halversen: "We aren't supposed to say anything, but Dr. John did
something wrong, he won't be back in the business. John Myers, his former
partner, said he is suicidal, he had some kind of nervous breakdown, and
dangerous. Myers is lucky, Dr john did all the work, now Myers and
Massengill will get all the revenue of Dr. John's hard work. Life is strange,
Myers comes in Stoned while Dr. John worked his butt off. Verble was
continually frustrated with Myers work and Moral ethics."
36. Agents of the FBI visited Defendant MSSB's branch manager, David Elias, in
2014 and informed Mr. Elias that he was not entitled to harass or slander their
confidential source and that such harassment and slander were a violation of
Federal law. But, notwithstanding the admonition from the FBI, MSSB has
continued to slander Plaintiff to Plaintiffs former and current clients and MSSB
continues to retaliate against Plaintiff by fraudulently withholding money that
belongs to Plaintiff.
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37. When Plaintiff was hired, MSSB gave Plaintiff a signing bonus in the amount of
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$670,281. This bonus was in the form of a "loan" that was to be forgiven m
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equal installments over a period of nine years conditioned upon Plaintiff working
for that period at MSSB.
38. Plaintiffs departure from MSSB was entirely involuntary and exclusively the
result of MS SB' s illegal action in retaliating against Plaintiff for his legitimate
cooperation with Federal law enforcement authorities, including by way of
example, the FBI and SEC.
39. Currently Plaintiff has on deposit at MSSB approximately $242,471 in his
brokerage account that MSSB is holding hostage under allegations that Plaintiff
owes MSSB money to repay that portion of the signing bonus not yet forgiven.
40. At the time of the filing of this Complaint, the discriminatory practice of
Defendants has not ceased because money that belongs to Plaintiff is being
unlawfully withheld by Defendants as part of the "pretext" under which Plaintiff
was fired.
41. Furthermore, the oppression of Plaintiff continues; in an effort to force Plaintiff
into arbitration, MSSB has filed a claim before FINRA to collect the remainder
of the signing bonus "loan", which, because of the unlawful firing of which
Defendants have actual knowledge, Plaintiff does not owe.
42. Notwithstanding that Defendants had been informed by Plaintiffs undersigned
counsel that arbitration will be precluded because of Sarbanes Oxley issues
implicating FINRA Rule 13201(b), Defendants, out of sheer malice, have
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persisted in costing Plaintiff legal fees and anxiety by pressing the FINRA issue
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notwithstanding that Defendants have actual knowledge of the violations that
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were perpetrated by Defendants' agents and servants, and about which Plaintiff
informed the Federal authorities.
43. Plaintiff is entitled to reinstatement and, therefore, will owe MSSB nothing.
44. Defendants assert, as per the letter to Plaintiff from David Elias, First Vice
President and Branch Manager of the Knoxville Office, dated 17 June 2013, that
Plaintiffs cooperation with the FBI was not the proximate cause of Plaintiffs
discharge, but rather that a gift received by Plaintiffs daughter five years earlier
precipitated Plaintiffs discharge.
45. Advancing as a reason for discharge the alleged gift to Plaintiffs daughter is
entirely "pretextual" and such pretext is fully rebutted under the ancient principle
of post hoc ergo propter hoc.
46. Permission had been given to Plaintiff for the gift referred to in Paragraph 43 by
Plaintiffs manager, David Elias, and notwithstanding Mr. Elias's knowledge of
the gift, no action was taken against Plaintiff until five years later when it
became obvious that Plaintiff was cooperating with the FBI and enforcing the
provisions of 31 U.S.C. §3729 and other Federal criminal statutes including the
Sarbanes Oxley Act cited supra prohibiting insider trading and forbidding fraud
in publicly traded companies.
4 7. Before Plaintiffs illegal discharge, Plaintiff brought to Defendants' attention the
fact that both SEC regulations and the Sarbanes Oxley Act were being violated
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by executive employees of Defendants' Knoxville branch.
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48. The wrongdoing to which Plaintiff alluded in his conversations with Defendants'
management is summarized in a complaint filed by his counsel, Zahra
Karinshak, Esq. of the firm of Kevolin & Horst, LLC of Atlanta, Georgia dated
20 September 2013 before the Securities and Exchange Commission in Atlanta
and currently pending before the SEC.
49. In firing Plaintiff, both Defendants acted: (1) intentionally, (2) fraudulently, (3)
maliciously, and/or (4) recklessly. Both Defendants had the conscious objective
or desire to cause the injury to Plaintiff.
50. Both
Defendants
acted
fraudulently
m
that
Defendants
intentionally
misrepresented the existing material fact behind Plaintiffs firing, asserting that
Plaintiff was fired as the result of a gift to his daughter rather than because he
had been a government informant, and both Defendants misrepresented this fact
to produce a false impression in order to mislead Plaintiff, Plaintiffs counsel and
any jury impaneled to adjudicate plaintiffs rights and for the purpose of
obtaining an undue advantage.
51. Both Defendants acted and continue to act maliciously under Tennessee
common law and Tenn. Code Ann. § 50-1-304 because both Defendants were
motivated by ill will, hatred, and/or personal spite toward Plaintiff.
52. Both Defendants acted recklessly in that they were aware of the true facts, but
consciously disregarded those facts, and by withholding Plaintiffs money,
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continue to this day to disregard such fact creating the substantial and
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unjustifiable risk of illegal discharge such that Defendants' disregard of the facts
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constituted and continues to constitute a gross deviation from the standard of
care under Tenn. Code Ann. § 50-1-304 that an ordinary person operating a
brokerage business would exercise under all the circumstances.
53. Plaintiff has been fired because he assisted Federal authorities with regard to (1)
fraud perpetrated upon the Government of the United States; (2) wrongdoing in
the securities industry, including by way of example, insider trading; and (3)
fraud and other wrongs committed by persons with regard to a publicly traded
company or companies including, by way of example, manipulation of stock
prices and false reporting to the Securities and Exchange Commission and other
regulatory bodies.
54. Plaintiff refused to participate in, or to remain silent about, the Defendants' and
more importantly, Defendants' clients' illegal activities herein described, to-wit
activities that are in violation of the criminal or civil code of Tennessee and/or of
the United States and Federal and State regulations intended to protect the public
health, safety or welfare.
55. The sole and exclusive cause of Plaintiffs firing and the continuing retaliatory
and discriminatory actions by Defendants was Plaintiffs refusal to participate in
or to remain silent about Defendants' and/or Defendants' clients' illegal
activities.
56. As a direct result of Defendants' malicious and deliberate actions, Plaintiff
NEELY & CALLAGHAN
159 SUMMERS STREET
CHARLESTON
W VA
suffered acute emotional distress which caused substantial physical personal
25301-2134
(304) 343-6500
Page 16 of 20
Case 3:15-cv-00074-TAV-CCS Document 1 Filed 02/19/15 Page 16 of 20 PageID #: 16
injuries; Plaintiff began to suffer and continues to suffer from acute gastrointestinal distress, chronic headaches and episodic impairment of his vision.
DAMAGES
57. Pursuant to the terms of 31 U.S.e. §3730(h) Plaintiff is entitled to twice his
annual compensation of $359,859 plus the value of his health insurance and
MSSB's contribution to his 40l(k) plan from the date of his discharge until the
resolution of this case.
58. Pursuant to the terms of 31 U.S.e. §3730(h) Plaintiff is entitled to reinstatement
to his previous position and to no further discriminatory actions against him.
59.Plaintiff is also entitled to back pay and reinstatement pursuant to 15 uses §
78u-6(h) and 18 U.S.e. §1514A.
60. Plaintiff is entitled to restoration of the approximately $263,000 that MSSB is
currently holding hostage because Plaintiff will be reinstated to his former
position with all its seniority and benefits, and/ or because Plaintiffs termination
was the illegal act ofMSSB and, therefore, cannot result in a penalty.
61. In the event that MSSB refuses to rehire Plaintiff and restore him to his previous
position in all regards, then Plaintiff is entitled under 31 U.S.e. §3730(h) to
twice the value of his salary from the date of discharge until retirement age at 68.
62. In the alternative, Plaintiff is entitled to compensatory damages in the form of all
back pay and to various penalties pursuant to 15 uses § 78u-6(h) which
NEELY & CALLAGHAN
159 SUMMERS STREET
CHARLESTON
W VA
25301-2134
protects employees who inform Federal authorities of fraud and other
(304) 343-6500
wrongdoing in the securities industry, and pursuant to 18 U.S.e. §1514A, which
Page 17 of 20
Case 3:15-cv-00074-TAV-CCS Document 1 Filed 02/19/15 Page 17 of 20 PageID #: 17
protects employees who inform Federal authorities concerning fraud and other
wrongdoing in publicly traded companies.
63. Plaintiff is entitled to compensation under Tennessee common law for the
physical injuries caused by Defendants' intentional and/or negligent infliction of
emotional distress, to-wit acute gastro-intestinal problems, constant headaches
and episodic vision impairment.
64. Plaintiff is further entitled to punitive damages pursuant to Tenn. Code Ann. §
50-1-304 and Tennessee common law, and to all attorneys' fees and costs
associated with this proceeding pursuant to 31
u.s.c. §3730(h), 15 uses § 78u-
6(h), 18 U.S.C. §1514A.
65. Plaintiff is entitled to pre-judgment interest on all back pay pursuant to 31
U.S.C. §3730(h); Plaintiff is entitled to pre-judgment interest on all special
damages found by the jury under Tennessee law; and, Plaintiff is entitled to prejudgment interest on special damages pursuant to general federal law.
66. The Federal law enforcement agencies are still pursuing investigations that were
initiated by Plaintiffs information and through Plaintiffs own investigative
efforts. Plaintiff reserves the right to amend this Complaint to allege further
specific facts in support of his allegations when and as the Federal enforcement
authorities authorize public disclosure and additional prosecutions and/or civil
proceedings are made public.
NEELY & CALLAGHAN
159 SUMMERS STREET
CHARLESTON
W VA
25301-2134
JURY TRIAL DEMANDED
(304) 343-6500
Plaintiff demands a trial by jury on all issues triable as a matter of right before a jury.
Page 18 of 20
Case 3:15-cv-00074-TAV-CCS Document 1 Filed 02/19/15 Page 18 of 20 PageID #: 18
PRAYER
Wherefore, Plaintiff prays that after trial by jury this Honorable Court award him
ll damages to which he is entitled under 31 U.S.C. §3730(h), 15 USCS § 78u-6(h) and
8 U.S.C. §1514A; all monies that MSSB is currently holding hostage that belong to
laintiff; reinstatement of Plaintiff to his former position with no further discrimination
r disadvantage that may have arisen as a result of his illegal discharge; a ruling that
ecause Plaintiff was illegally fired from MSSB, under no circumstances does Plaintiff
we money pursuant to the loan repayment agreement into which Plaintiff entered at the
'me he was employed by MSSB; damages for defamation under State law; damages for
hysical injuries brought on my Defendants' malicious actions; and, punitive damages
nd all attorneys' fees, costs and related expenses associated with the prosecution of this
ction. And Plaintiff further prays for such other and further relief, both legal and
59 Summers St.
harleston, WV 25301-2134
04-343-6500 voice
04-343-6528
NEELY & CALLAGHAN
159 SUMMERS STREET
CHARLESTON
W VA
25301-2134
(304) 343-6500
Page 19 of 20
Case 3:15-cv-00074-TAV-CCS Document 1 Filed 02/19/15 Page 19 of 20 PageID #: 19
906 Glen Echo Road #158948
NEELY & CALLAGHAN
159 SUMMERS STREET
CHARLESTON
W VA
25301-2134
(304) 343-6500
Page 20 of 20
Case 3:15-cv-00074-TAV-CCS Document 1 Filed 02/19/15 Page 20 of 20 PageID #: 20
CIVIL COVER SHEET
JS 44 (Rev. 12/\2)
The JS 44 civil cover sheet and the information contained herein neither replace nor supplement the filing and service of pleadings or other papers as required by law, except as
provided bv local rules of court. This form approved by the Judicial Conference of the United States in September 1974. is required for the use of the Clerk of Court for the
purpose o(initiating the civil docket sheet. (SEE INSTRUC710NS ON NEXr PAGE OF THIS FORM)
DEFENDANTS
I. (a) PLAINTIFFS
Morgan Stanley Smith Barney, LLC and
Morgan Stanley & Co., Inc.
John S. Verble
~R=o=a=n=e~------(/,XCHPT IN US PLAINTIFF CASES)
County of Residence ofFirst Listed Defendant
(b) County of Residence ofFirst Listed Plaintiff
(IN US. PLAIN71FF CASHS ONLY)
NOTE:
{C) Attorneys (Firm
IN LAND CONDEMNATION CASES, USE THE LOCATION OF
THETRACTOFLANDINVOLVED
Attorneys (If Known)
Name, Address, and Telephone Numher)
Richard Neely 304 343-6500
Jackie Sharp, Jr. 615 545-4744
Neely & Callaghan
1906 Glen Echo Rd #158948
159 Summers St., Charleston, WV 25301 Nashville, TN 37215
Ill. CITIZENSHIP OF PRINCIPAL PARTIES (Place an
II. BASIS OF JURISDICTION (Placean "X"inOneBoxOnly)
0 I
0 2
U.S. Government
Plaintiff
11!1 3
U.S. Government
Defendant
0 4
Federal Question
(U.S. Government Not a Party)
Diversity
(Indicate Cillzenship of Parties in Item Ill)
IV. NATURE OF SUIT (Place an
..
I
0
0
0
0
0
0
0
0
0
0
0
0
l l 0 Insurance
l20Marine
130 Miller Act
140 Negotiable lnstrwnent
150 Recovery of Overpayment
& Enforcement of Judgment
151 Medicare Act
152 Recovery of Defaulted
Student Loans
(Excludes Veterans)
15 3 Recovery of Overpayment
of Veteran's Benefits
160 Stockholders' Suits
190 Other Contract
195 Contract Product Liability
196 Franchise
• ........:><
0 310 Airplane
0 315 Airplane Product
0
0
0
0
0
0
0
210
220
230
240
245
290
Land Condemnation
Foreclosure
Rent Lease & Ejectrnent
Torts to Land
Tort Product Liabiiity
All Other Real Property
V. ORIGIN
0
0
0
0
DEF
0
l
Citizen of Another State
0 2
0
2
Incorporated and Principal Place
of Business In Another State
0
5
Ill 5
Citizen or Subject of a
F orei n Count
0 3
0
3
Foreign Nation
0
6
0 6
..•.· .
.
.·· .
._,
PERSONAL INJURY
ENA•Tf
0 625 Drug Related Seizure
0 365 Personal Injury -
Liability
320 Assault, Libel &
Slander
330 Federal Employers'
Liability
340 Marine
345 Marine Product
Liability
350 Motor Vehicle
355 Motor Vehicle
Product Liability
360 Other Personal
Injury
362 Personal Injury Medical Malpractice
' ClVll
0
0
0
0
0
0
"X" in One Boxfor l'lamt1ff
and One Box.for Defendant)
PTF
DEF
Incorporated or Principal Place
0 4
0 4
of Business In This State
"X" m One Box Only)
PERSONAL INJURY
0
(For Diversity Cases Only)
PTF
Citizen of This State
Ill l
0 690 Other
PERSONAL PROPERTY
0 370 Other Fraud
0 371 Truth in Lending
0 380 Other Personal
Property Damage
0 385 Property Damage
Product Liability
0 710 Fair Labor Standards
Other Civil Rights
Voting
Employment
Housing/
Accommodations
0 445 Amer. w/Disabilities Employment
0 446 Amer. w/Disabilities Other
0 448 Education
Habeas Corpus:
0 463 Alien Detainee
0 510 Motions to Vacate
Sentence
0 530 General
0 535 Death Penalty
Other:
0 540 Mandamus & Other
0 550 Civil Rights
0 555 Prison Condition
0 560 Civil Detainee Conditions of
Confinement
~·-~~
'"Tt:Y
28
use 157
__ ,, .
_,.
0 820 Copyrights
0 830 Patent
0 840 Trademark
.
I 4tulll
0
0
0
0
0
Rfl>HTS
440
441
442
443
of Property 21 USC 881
Product Liability
0 367 Health Care/
Pharmaceutical
Personal Injury
Product Liability
0 368 Asbestos Personal
Injury Product
Liability
••
0 422 Appeal 28 USC 158
0 423 Withdrawal
Act
720 Labor/Management
Relations
740 Railway Labor Act
751 Family and Medical
Leave Act
790 Other Labor Litigation
791 Employee Retirement
Income Security Act
0
0
0
0
0
"
U"l"Hlt;N
0
0
0
0
0
0
0
0
0
0
861 HIA (1395ff)
862 Black Lung (923)
863 DIWC/DIWW (405(g))
864 SSID Title XVI
865 RSI ( 405(g))
11!1
,,..,,DERAl
0
0
'f&Y•:t
ITS
0
0
0
0 870 Taxes (U.S. Plaintiff
or Defendant)
0 871 IRS-Third Party
26
use 7609
0
STA'n rn~"i
375 False Claims Act
400 State Reapportionment
410 Antitrust
430 Banks and Banking
450 Commerce
460 Deportation
4 70 Racketeer Influenced and
Corrupt Organizations
480 Consumer Credit
490 Cable/Sat TV
850 Securities/Commodities/
Exchange
890 Other Statutory Actions
891 Agricultural Acts
893 Environmental Matters
895 Freedom of lnfom1ation
Act
896 Arbitration
899 Administrative Procedure
Act/Review or Appeal of
Agency Decision
950 Constitutionality of
State Statutes
IMMIGRATION
0 462 Naturalization Application
0 465 Otl1er Immigration
Actions
(Place an "X" in One Box Only)
)!( 1 Original
Proceeding
0 2 Removed from
0
3
State Court
Remanded from
Appellate Court
0 4 Reinstated or
0 5 Transferred from
Reopened
0 6 Multidistrict
Another District
Litigation
('pecify)
Cite the U.S. Civil
St~tute
under which you are fi_ling (Do not cite jurisdictional statutes unless diversity):
VI. CAUSE OF ACTION t-3_1_U_._s_.c_._3_72_9~,_15_U_sc_s__7_8u_-_6_h....,.._1_8_U_.s_._c......._1_5_1_4A
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
Brief description of cause:
unlawful firing for whistleblowing
VII. REQUESTED IN
0
COMPLAINT:
VIII. RELATED CASE{S)
IF ANY
CHECK IF THIS JS A CLASS ACTION
UNDER RULE 23, F.R.Cv.P.
DEMAND$
5,000,000.00
CHECK YES only if demanded in complaint:
JllRY DEMAND:
;8J Yes
0 No
(See instructions):
JUDGE
DOCKET NUMBER
YOFRECORD
RECEIPT#
Case 3:15-cv-00074-TAV-CCS
Document 1-1 Filed 02/19/15
Page 1 ofMAG.JUDGE
1 PageID #: 21
JUDGE
AMOUNT
I