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WhistleblowerA former Financial Industry Regulatory Authority, Joseph Sciddurlo claimed in a suit filed last week that he worked as a principal examiner for FINRA in 2010 when he discovered that the regulator’s system allowed large firms to circumvent a Securities and Exchange commission’s rule limiting leverage to 15 times net capital.

According to the complaint filed in federal court in Manhattan, Sciddurlo said he was initially “commended for his financial expertise and asked to design a better risk-rating methodology with respect to broker-dealers. Later, he was downgraded, placed on probation and fired in May 2011, without a legitimate reason,” Sciddurlo said.

In the suit, Sciddurlo claimed FINRA illegally discriminated against him on the basis of age and fired him for threatening to disclose the risk-rating flaw to other regulators and to the public. He’s seeking at least $25 million in damages.*

*OnWallSteet.com, Bob Van Doris, “Ex-Finra Employee Claims…”, April 5, 2013