A former senior executive at Bank of America, who was fired amid allegations of sexual misconduct, filed a defamation claim against the company and is seeking damages of more than $100 million.
Omeed Malik — who was a managing director in Bank of America’s prime brokerage business until January — filed an arbitration claim this week through the Financial Industry Regulatory Authority, or FINRA. CNBC verified the existence of the claim and that it had been filed.
This claim is separate from a discrimination suit that Malik, 38, plans to file against Bank of America in New York state court, according to John Singer, partner and co-founder of Singer Deutsch, which is representing Malik.
“The overt and career-killing defamation that Mr. Malik has endured is simply unprecedented in the annals of Wall Street history,” said Singer, by email. It is “all the more glaring when contrasted with the bank’s long history of burying and obfuscating actual misconduct — not to mention serious crimes — that have been perpetrated by white males.”
“The bank stands by its decision to terminate Mr. Malik,” Bill Halldin, a representative for Bank of America, said. “His claims are without merit and we will defend ourselves in this matter.”
Malik was let go from the bank on Jan. 9, weeks before receiving his bonus. On Jan. 18, Reuters published a story, citing “a person familiar with the matter,” on Malik’s plans to start his own advisory firm for hedge funds.
One day later, The New York Times reported that Malik departed the bank after an “internal investigation into a young female banker’s accusation of inappropriate sexual conduct.” The story cited “people at the bank who were briefed on the investigation.” The Times wrote that details of the conduct that led to Malik’s departure were “unclear.”
In late February, The Wall Street Journal reported that Bank of America had fired two more employees from Malik’s former unit after determining they interfered with the investigation into Malik’s behavior. The story, which also cited “people familiar with the matter,” said that bank officials believed that Malik and others were trying to intervene in the probe by coordinating stories told to the investigators about his behavior. The Journal said Malik’s conduct allegedly included pursuing relationships with subordinates at the company.
“Mr. Malik did nothing whatsoever to interfere with, collude or obstruct in any way in whatever sham ‘investigation’ or ‘review,'” Singer said. “Notably, Mr. Malik has never engaged in wrongdoing and, as such, there was nothing about which to even collude.”
Malik was not informed at the time of the bank’s reason for terminating him, Singer said. A Form U5, which is the FINRA document reflecting the bank’s reason for termination, stated that he was let go due to personal conduct in violation of firm standards, including interfering with the firm’s review of the matter, people with knowledge of the form said.
Malik’s FINRA claim also asserts that the firm is liable for breach of contract and unjust enrichment over the cancellation of Malik’s deferred compensation and bonus.
Singer said Bank of America was “shamelessly exploiting the #MeToo movement and utilizing Mr. Malik as a sacrificial lamb to not only ameliorate their PR but moreover to destroy Mr. Malik’s competitive nascent business.”
Singer also said that “Mr. Malik was retaliated against for blowing the whistle on regulatory violations” by his direct supervisor, who he said did not have the appropriate FINRA licenses to solicit American business.
Discrimination claims are not mandated to be arbitrated through FINRA and can go through regular court proceedings, Singer said. The focus of Malik’s discrimination case will be his Middle Eastern descent and the bank’s alleged propensity to retain white male executives who had a pattern of misbehavior.
“The bank intentionally and systematically defamed Mr. Malik, globally, to the news media at two different points in time subsequent to its wrongful termination of Mr. Malik in order to mask the pre-textual, political and discriminatory reasons why it terminated him,” Singer said.
Link to the source of information: www.cnbc.com
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