Read the full lawsuit - · PDF fileNEELY & CALLAGHAN 159 SUMMERS STREET CHARLESTON W VA 25301-2134 (304) 343-6500 JURISDICTION AND VENUE 1. Jurisdiction

NEELY & CALLAGHAN 159 SUMMERS STREET

CHARLESTON

W VA 25301-2134

(304) 343~6500

IN THE UNITED STATES DISTRICT COURT FO&-~~f r:n EASTERN DISTRICT OF TENNESSEE .. i - , - ~ ~--""

at Knoxville

JOHN S. VERBLE

Plaintiff

v.

MORGAN STANLEY SMITH BARNEY, LLC

and

MORGAN STANLEY & CO., INC.

Defendants

COMPLAINT

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Civil Action No.:

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JURY TRIAL DEMANDED

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

naturally from the intentional and/or negligent infliction of emotional distress pursuant to

Tennessee common law.

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Case 3:15-cv-00074-TAV-CCS Document 1 Filed 02/19/15 Page 1 of 20 PageID #: 1


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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 pre-

dispute arbitration contract clauses in whistleblower actions where violations by

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.

9. On or about 13 November 2006 Plaintiff entered into an employment agreement

with the branch office of Defendant MSSB at Landmark Center, 1111 North

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

conference room where four other MSSB persons were present, including a

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.

1 7. 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

and the physical threat to the FBI.

20. Plaintiffs collaboration with the FBI and his work as a confidential source

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

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.

Lexie Holden Job: Account representative for Brian Mosher and others

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).

23. Many of the persons who pled guilty to federal charges directly related to

Plaintiffs work with the FBI were Morgan Stanley customers and Plaintiffs

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.

"Dr. John, I don't know why you are asking about this or where you are going

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 § 1 O(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

loan to stockholders or the SEC.

32. Management of MSSB suspected that Plaintiff was also involved in relating

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.

3 3. 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."

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.

37. When Plaintiff was hired, MSSB gave Plaintiff a signing bonus in the amount of

$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

persisted in costing Plaintiff legal fees and anxiety by pressing the FINRA issue

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

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,

continue to this day to disregard such fact creating the substantial and

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.

5 3. 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

suffered acute emotional distress which caused substantial physical personal

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injuries; Plaintiff began to suffer and continues to suffer from acute gastro-

intestinal 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

protects employees who inform Federal authorities of fraud and other

wrongdoing in the securities industry, and pursuant to 18 U.S.e. §1514A, which

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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 pre-

judgment 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.

JURY TRIAL DEMANDED

Plaintiff demands a trial by jury on all issues triable as a matter of right before a jury.

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(304) 343-6500

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

Page 19 of 20



CHARLESTON

W VA 25301-2134

(304) 343-6500

906 Glen Echo Road #158948

Page 20 of 20


JS 44 (Rev. 12/\2) CIVIL COVER SHEET 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)

I. (a) PLAINTIFFS John S. Verble

(b) County of Residence ofFirst Listed Plaintiff ~R=o=a=n=e~-------(/,XCHPT IN US PLAINTIFF CASES)

{ C) Attorneys (Firm 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

DEFENDANTS Morgan Stanley Smith Barney, LLC and Morgan Stanley & Co., Inc.

County of Residence ofFirst Listed Defendant (IN US. PLAIN71FF CASHS ONLY)

NOTE: IN LAND CONDEMNATION CASES, USE THE LOCATION OF THETRACTOFLANDINVOLVED

Attorneys (If Known)

II. BASIS OF JURISDICTION (Placean "X"inOneBoxOnly) Ill. CITIZENSHIP OF PRINCIPAL PARTIES (Place an "X" in One Boxfor l'lamt1ff

0 I U.S. Government

Plaintiff

0 2 U.S. Government Defendant

11!1 3 Federal Question

(U.S. Government Not a Party)

0 4 Diversity (Indicate Cillzenship of Parties in Item Ill)

IV. NATURE OF SUIT (Place an "X" m One Box Only) I .. • ........ :>< ..•. ··. . ._, .·· .

0 l l 0 Insurance 0 l20Marine 0 130 Miller Act 0 140 Negotiable lnstrwnent 0 150 Recovery of Overpayment

& Enforcement of Judgment 0 151 Medicare Act 0 152 Recovery of Defaulted

Student Loans (Excludes Veterans)

0 15 3 Recovery of Overpayment of Veteran's Benefits

0 160 Stockholders' Suits 0 190 Other Contract 0 195 Contract Product Liability 0 196 Franchise

0 210 Land Condemnation 0 220 Foreclosure 0 230 Rent Lease & Ejectrnent 0 240 Torts to Land 0 245 Tort Product Liabiiity 0 290 All Other Real Property

PERSONAL INJURY 0 310 Airplane 0 315 Airplane Product

Liability 0 320 Assault, Libel &

Slander 0 330 Federal Employers'

Liability 0 340 Marine 0 345 Marine Product

Liability 0 350 Motor Vehicle 0 355 Motor Vehicle

Product Liability 0 360 Other Personal

Injury 0 362 Personal Injury -

Medical Malpractice ' ClVll Rfl>HTS

0 440 Other Civil Rights 0 441 Voting 0 442 Employment 0 443 Housing/

Accommodations 0 445 Amer. w/Disabilities -

Employment 0 446 Amer. w/Disabilities -

Other 0 448 Education

V. ORIGIN (Place an "X" in One Box Only)

PERSONAL INJURY 0 365 Personal Injury -

Product Liability 0 367 Health Care/

Pharmaceutical Personal Injury Product Liability

0 368 Asbestos Personal Injury Product Liability

PERSONAL PROPERTY 0 370 Other Fraud 0 371 Truth in Lending 0 380 Other Personal

Property Damage 0 385 Property Damage

Product Liability

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

(For Diversity Cases Only) PTF

and One Box.for Defendant) PTF DEF

Citizen of This State Ill l

DEF

0 l Incorporated or Principal Place of Business In This State

0 4 0 4

Citizen of Another State

Citizen or Subject of a F orei n Count

ENA•Tf

0 625 Drug Related Seizure of Property 21 USC 881

0 690 Other

I 4tulll

0 710 Fair Labor Standards Act

0 720 Labor/Management Relations

0 7 40 Railway Labor Act 0 751 Family and Medical

Leave Act 0 790 Other Labor Litigation 0 791 Employee Retirement

Income Security Act

IMMIGRATION

0 2 0 2 Incorporated and Principal Place of Business In Another State

0 5 Ill 5

0 3 0 3 Foreign Nation 0 6 0 6

•• ~·-~~ '"Tt:Y U"l"Hlt;N STA'n rn~"i

0 422 Appeal 28 USC 158 0 375 False Claims Act 0 423 Withdrawal 0 400 State Reapportionment

28 use 157 0 410 Antitrust 0 430 Banks and Banking _,. __ ,, . 0 450 Commerce

0 820 Copyrights 0 460 Deportation 0 830 Patent 0 4 70 Racketeer Influenced and 0 840 Trademark Corrupt Organizations

0 480 Consumer Credit . " 0 490 Cable/Sat TV 0 861 HIA (1395ff) 0 850 Securities/Commodities/ 0 862 Black Lung (923) Exchange 0 863 DIWC/DIWW (405(g)) 11!1 890 Other Statutory Actions 0 864 SSID Title XVI 0 891 Agricultural Acts 0 865 RSI ( 405(g)) 0 893 Environmental Matters

0 895 Freedom of lnfom1ation Act

0 896 Arbitration ,,..,,DERAl 'f&Y•:t ITS 0 899 Administrative Procedure

0 870 Taxes (U.S. Plaintiff Act/Review or Appeal of or Defendant) Agency Decision

0 871 IRS-Third Party 0 950 Constitutionality of 26 use 7609 State Statutes

0 462 Naturalization Application 0 465 Otl1er Immigration

Actions

)!( 1 Original 0 2 Removed from 0 3 Remanded from Appellate Court

0 4 Reinstated or 0 5 Transferred from 0 6 Multidistrict Proceeding State Court Reopened Another District Litigation

('pecify)

I

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:

VII. REQUESTED IN COMPLAINT:

VIII. RELATED CASE{S) IF ANY

unlawful firing for whistleblowing

0 CHECK IF THIS JS A CLASS ACTION UNDER RULE 23, F.R.Cv.P.

(See instructions): JUDGE

RECEIPT# AMOUNT

DEMAND$

5,000,000.00

YOFRECORD

JUDGE

CHECK YES only if demanded in complaint:

JllRY DEMAND: ;8J Yes 0 No

DOCKET NUMBER

MAG.JUDGE Case 3:15-cv-00074-TAV-CCS Document 1-1 Filed 02/19/15 Page 1 of 1 PageID #: 21

Documents

Read the full lawsuit - · PDF fileNEELY & CALLAGHAN 159 SUMMERS STREET CHARLESTON W VA 25301-2134 (304) 343-6500 JURISDICTION AND VENUE 1. Jurisdiction