A former UBS bond strategist, who had won a major victory at the U.S. Supreme Court, faced a major setback on Monday. A jury had awarded him compensation after he claimed the bank fired him for blowing the whistle on potential misconduct. However, the 2nd U.S. Circuit Court of Appeals in Manhattan threw out the jury’s verdict, citing errors in the instructions given to the jury during the 2020 trial.
In a 2-1 ruling, the appeals court stated that the jury had been wrongly guided to conclude that Trevor Murray’s whistleblowing had contributed to his firing. Judge Michael Park, writing for the court, explained that whistleblowing must directly cause or help cause a termination decision. It is not enough for it to merely influence or be related to the decision.
The decision means UBS is not required to pay Murray the $903,300 awarded by the jury, nor the $1.77 million in legal fees. The original jury instructions, given by U.S. District Judge Katherine Polk Failla, allowed jurors to find that whistleblowing was a contributing factor if it “tended to affect” the bank’s decision. Judge Park ruled that this standard was too broad, allowing the jury to hold UBS accountable without evidence that Murray’s actions directly led to his termination. The case was sent back to Judge Failla for further review.
This latest ruling follows a previous Supreme Court decision in February, which had restored the jury’s verdict after the 2nd Circuit initially dismissed it. The high court’s ruling clarified that financial industry whistleblowers don’t need to prove that their employers had “retaliatory intent.” Instead, they only need to show that their whistleblowing led to different treatment.
Murray claimed that UBS fired him in February 2012 after he raised concerns about pressure to produce overly optimistic reports on commercial mortgage-backed securities. He argued that this violated the Sarbanes-Oxley corporate governance law. UBS, on the other hand, stated that Murray’s firing was part of a broader cost-cutting initiative, which included thousands of layoffs following a $2 billion loss caused by a rogue trader.
Judge Myrna Perez dissented from the majority opinion, arguing that the jury instructions given by Judge Failla were clear enough for reasonable jurors to understand.
This case is known as Murray v UBS Securities LLC et al, 2nd U.S. Circuit Court of Appeals, No. 20-4202.
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