San Francisco Chronicle
Ex-manager of sales sues Deutsche Bank
Whistle-blower says he was fired for talking to SEC
Bob Egelko, Chronicle Staff Writer
Saturday, May 21, 2005
A former $500,000-a-year sales manager for Deutsche Bank in San Francisco has filed a $20 million whistle-blower suit claiming he was fired, and blacklisted in the industry, for refusing to lie to federal regulators about the giant financial company’s trading practices.
The suit by Lawrence Romaneck, filed Thursday in San Francisco Superior Court, accuses company managers of singling him out to “take the fall for market timing,” a practice in which he said he never participated.
Market timing is the rapid buying and selling of mutual fund shares to take advantage of price fluctuations. It is not illegal but can hurt long-term shareholders and is therefore restricted by most mutual fund companies.
The Securities and Exchange Commission, accused by congressional critics of ignoring the problem for too long, has recently sued and won large settlements from fund companies for secretly allowing favored clients to engage in market timing.
Romaneck, 56, a 25-year securities industry veteran, was Deutsche Bank’s Western regional sales director until he was fired last May. He said in his suit that he learned of market-timing violations in late 2003 and provided documents to the SEC.
After he was subpoenaed in March 2004 to testify before the SEC and the New York attorney general’s office, Deutsche Bank tried to get him to limit his testimony and pressed him on what he planned to say, but he insisted he would tell regulators everything he knew, the suit said.
Romaneck was fired “shortly after he refused to submit to (Deutsche Bank’s) pressure regarding his testimony,” attorney Kelly Armstrong wrote in the suit. She said he testified for four hours in July, two months after his dismissal.
After firing him, the company filed a report with the SEC that falsely accused him of wrongdoing and has made him unemployable, Romaneck said. His suit also accuses Deutsche Bank of firing him while he was disabled from a work-related injury, and of cheating him out of commissions.
Deutsche Bank spokesperson Rohini Pragasam said the company would not comment on pending litigation.