A former chief compliance officer at National Holdings Corp. has filed a lawsuit against the company, claiming she was terminated after 16 years with the brokerage firm because she began looking into allegations of insider trading by the firm’s executives.
The lawsuit was filed this summer in the U.S. District Court for the Southern District of New York. The whistleblower, Kay Johnson, specifically named chairman and CEO Michael Mullen as one of the people who had committed insider trading. Her lawsuit names the defendants as being 12 individuals, National Securities Corp. and National Asset Management, which are both subsidiaries of National Holdings.
Before the alleged retaliation occurred, Johnson has received rave reviews from her superiors, including Mullen, and was on a long-term plan to be moved into higher-up roles. She had also received her largest-ever bonus just two months before being fired.
However, in September 2018, a clearing firm alerted Johnson to questionable trading activity on the part of Mullen. She alleges that Mullen bought 470 put options on TG Therapeutics, valued at nearly $115,000. The trade was approved on September 13, and on September 25 the stock for TG dropped by about 44 percent, which resulted in a profit of more than 200 percent for Mullen, who sold his options on the same day of the announcement.
The suit also includes allegations of sexual harassment that led to another woman quitting the company.
There are more rules in place to protect people against whistleblower retaliation than ever before. If you believe you have been wrongfully terminated after speaking out against corporate wrongdoing, contact an experienced attorney at Kardell Law Group.