UBS Must Face Former CMBS Strategist’s Whistleblower Lawsuit

UBS AG was ordered to face a whistleblower lawsuit by a former commercial mortgage-backed securities strategist who said he was fired for telling supervisors he was being pressured to publish misleading reports.

U.S. District Judge Jesse Furman in Manhattan rejected the Swiss bank’s bid to throw out the case, saying in a decision filed yesterday that the former strategist, Trevor Murray, met requirements for proceeding under whistleblower provisions of federal law.

Murray, who was responsible for research and reports about CMBS products that were distributed to UBS clients, said he was pressured to skew his published research in ways designed to support UBS Securities’ CMBS trading and loan origination activities.

Murray brought the lawsuit under whistleblower protection provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, alleging that UBS violated the provisions because the decision to fire him was based partially on disclosures that are protected by the 2002 Sarbanes-Oxley investor-protection law.

UBS had argued that the suit should be dismissed because Murray didn’t report the allegations to the U.S. Securities and Exchange Commission and therefore isn’t legally defined as a whistle-blower.

Karina Byrne, a spokeswoman for Zurich-based UBS, didn’t immediately respond to an email Tuesday seeking comment on the decision.

Furman wrote that the SEC has interpreted the Dodd-Frank act’s protections “extend to those who make disclosures that are protected under the Sarbanes-Oxley Act, whether or not the disclosures were made to the SEC itself.”