KNOXVILLE (CN) - Morgan Stanley fired a financial advisor for working with the FBI to uncover a gas station rebate scam, the former employee claims in court.
John Verble sued Morgan Stanley Smith Barney LLC and Morgan Stanley & Co. Inc. last week in the Knoxville, Tenn., Federal Court for retaliatory discharge, harassment and discrimination.
Verble was a financial advisor for Morgan Stanley making more than $350,000 a year when he was fired for helping the FBI investigate the company's alleged fraud, according to the complaint.
He says he became aware of "numerous criminal activities" being committed by Morgan Stanley clients, including insider trading. Verble's cooperation with the FBI resulted in 10 former employees of gas station chain Pilot Flying J pleading guilty to fraud in a fuel rebate scheme, the lawsuit states.
Co-workers at Morgan Stanley started getting suspicious of Verble is late 2012 and early the next year, he claims.
"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," the complaint states. "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."
Verble was called into a meeting by Morgan Stanley executives in March 2013, where he was asked about his cooperation with the FBI. The meeting resulted in a physical threat by Verble's branch manager, he says.
"Plaintiff did not discuss any details of his involvement in any investigation or prosecution, but plaintiff's evasive answers to the defendants' questioning clearly signaled to the MSSB and Morgan Stanley management personnel in the room that he was working with the federal and/or state authorities," the lawsuit states. "Because it became apparent at the meeting...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!'"
Verble got up and left the meeting after the threat and he was fired the next month, the complaint says.
The fuel rebate scheme at Pilot Flying J involving reducing customer fuel discounts by two or three cents a gallon each month, and was done "out of loyalty to Pilot Flying J," the complaint says.
Verble says was warned not to the blow the whistle in 2012 when a senior financial advisor told him to keep quiet if he ever discovered fraud or insider trading because "Morgan Stanley will ruin you and you will never be able to get another job."
He also says Morgan Stanley defamed him to his former clients after firing him, calling him crazy and suicidal and claiming he embezzled money. They continued slandering his name after FBI agents told them to stop, according to the complaint.
Verble claims Morgan Stanley "is currently holding hostage" $242,000 belonging to him in a brokerage account.
He seeks punitive damages and reinstatement to his financial advisor position.
Verble is represented by Richard Neely of Neely & Callaghan in Charleston, W.Va.
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