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Murray v. Ubs Securities, LLC

United States District Court, Second Circuit

May 21, 2013

TREVOR MURRAY, Plaintiff,
v.
UBS SECURITIES, LLC and UBS AG, Defendants.

OPINION AND ORDER

JESSE M. FURMAN, District Judge.

Plaintiff Trevor Murray brings this action against his former employer, UBS Securities, LLC and its parent company UBS AG (collectively "UBS"), pursuant to the Securities Whistleblower Incentives and Protection provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, 15 U.S.C. § 78u-6(h) (the "Dodd-Frank Act" or the "Act"). In his Complaint, Plaintiff alleges that UBS violated the whistleblower protection provisions of the Dodd-Frank Act because the "decision to terminate Plaintiff's employment was motivated, in part, by his making disclosures that are protected by Section 806 of the Sarbanes Oxley Act (18 U.S.C. § 1514A)." (Compl. § 24). Defendants now move to dismiss the Complaint in its entirety pursuant to Federal Rule of Civil Procedure 12(b)(6) because Plaintiff did not allege that he made a report to the Securities and Exchange Commission ("SEC" or "the Commission"), and therefore is not a "whistleblower" under the Act. (Docket No. 13). For the reasons stated below, Defendants' motion to dismiss is DENIED.

BACKGROUND

On a motion to dismiss, a court may consider facts stated in the complaint, documents attached to the complaint, and documents incorporated by reference into the complaint. See, e.g., Nechis v. Oxford Health Plans, Inc., 421 F.3d 96, 100 (2d Cir. 2005). Accordingly, the following facts are taken from the Complaint and from documents attached to and referenced therein, and are assumed to be true for purposes of this motion. See, e.g., LaFaro v. N.Y. Cardiothoracic Grp., PLLC, 570 F.3d 471, 475 (2d Cir. 2009).

Defendant UBS AG is a Switzerland corporation that conducts business in New York. (Compl. § 6). UBS AG is required to file reports with the SEC under Section 15(d) of the Securities Exchange Act of 1934, 15 U.S.C. § 780(d) (the "1934 Act"), and it has a class of securities that must be registered pursuant to Section 12 of the 1934 Act, 15 U.S.C. § 781. ( Id. ). Defendant UBS Securities LLC, a Delaware corporation and a wholly owned subsidiary of UBS AG, is registered with the SEC as a broker-dealer and has a class of securities that must be registered pursuant to Section 12 of the 1934 Act, 15 U.S.C. § 781. ( Id. § 7). From May 2011 until February 2012, Plaintiff worked for UBS as a Senior Commercial Mortgage-Backed Security ("CMBS") Strategist. ( Id. §§ 5, 11). In this capacity, he was responsible for performing research and creating reports about UBS's CMBS products that were distributed to UBS's current and potential clients. ( Id. § 12). According to the Complaint, Plaintiff received nothing but positive performance reviews during his tenure in this position. ( Id. ).

In his Complaint, Plaintiff alleges that UBS engaged in a "concerted, extended effort" to "influence [him] to skew his published research in ways designed to support UBS Securities' ongoing CMBS trading and loan origination activities." ( Id. § 13). In particular, the Complaint avers that Ken Cohen, who was in charge of UBS Securities' CMBS trading and commercial mortgage originations, led efforts to pressure Plaintiff to craft his reports to be "more favorable" to UBS and to protect UBS's exposure. The Complaint describes a number of encounters between Plaintiff and UBS personnel with responsibility for CMBS trading who allegedly told Plaintiff that they "disagreed with [his] research, " instructed him "not to publish anything negative, " and to "write what the business line wanted." ( Id. §§ 14-16, 20).

Plaintiff believed that he was being pressured by his supervisors to produce purportedly objective research reports about security products that were false or misleading and intended to favor UBS's products and trading positions, in violation of federal laws. ( Id. § 19). Plaintiff repeatedly told his superiors at UBS about these attempts to influence his published research. ( Id. § 18). Specifically, the Complaint alleges that in December 2011 and January 2012, Plaintiff told his manager, Mike Schumacher, about these efforts to influence his research, including Cohen's remarks that Plaintiff's published articles were "too bearish" and were "off message" with the strategy of the CMBS trading desk and overall commercial mortgage group. ( Id. ). In January 2012, Plaintiff told Jeff Ho, a Managing Director at UBS, that Cohen only interacted with Plaintiff in order to criticize his research and attempt to manipulate his reports. ( Id. ). After his January 2012 performance review, Murray told Schumacher that he had been given limited resources to perform his research; Schumacher replied that he was aware of those limitations and that Murray should write "what the business line wanted, " irrespective of the resources available. ( Id. § 20). On February 6, 2012, Plaintiff was fired from his position at UBS. ( Id. § 22).

DISCUSSION

As noted, Plaintiff brings this suit pursuant to the Securities Whistleblower Incentives and Protection provisions of the Dodd-Frank Act. Specifically, Plaintiff alleges that Defendants violated Section 78u-6(h)(1)(A) of the Act, which provides that

[n]o 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-
(i) in providing information to the Commission in accordance with this section;
(ii) in initiating, testifying in, or assisting in any investigation or judicial or administrative action of the Commission based upon or related to such information; or
(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 10A(m) of such Act (15 U.S.C. 78f(m)), section 1513(e) of Title 18, and any other law, rule, or regulation subject to the jurisdiction of the Commission.

15 U.S.C. § 78u-6(h)(1)(A); see id. § 78u-6(h)(1)(B)(i) (providing a private right of action for an individual "who alleges discharge or other ...


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