Canada may be the Great White North, but things are decidedly not great for the Canadian arm of financial-services giant Salomon Smith Barney Inc.
The former finance chief and a bank analyst of Salomon Smith Barney Canada Inc. are both suing the firm for wrongful termination, reports Canada’s National Post.
The two separate lawsuits paint a picture of a desperate, and allegedly deceitful, backpedalling by the firm from the Canadian securities market.
Les Moskalewicz, Salomon’s former CFO and head of compliance, is seeking $1.25-million in damages, reports the Post. According to Moskalewicz’s claim, Salomon hired him away from a VP position at the Canadian arm of Goldman Sachs Group Inc in 1995. He allegedly took the job on Salomon’s pitch that the bank was committed to becoming the top U.S. investment dealer in Canada.
But when the firm failed to sweep the nation after six years, Salomon started planning for downsizing — and reportedly stepped on some toes in the process. In 2002, Moskalewicz charges, Salomon intentionally misled workers about their compensation contracts, changing titles and “lying to employees about their job status.” At least once, according to the complaint, the firm slashed an employee’s bonus to save money on severance when it fired that employer at a later date.
All this created “a difficult and adverse environment for employees at SSB,” Moskalewicz’s claim said.
According to suit, the last straw for Moskalewicz came when Salomon announced a big layoff round in November 2002. The suit alleges that, after the axed employees were given their walking papers, Moskalewicz (thinking he was doing his job as finance chief) asked to review a list of the employees owed severance. Guess whose name was on the list?
Moskalewicz asserts he then asked his supervisors what his name was doing on the list. According to his claim, after a day and a half, the answer came: His eight-year tenure with the firm was over. Moskalewicz calls this a “callous, highhanded and calculated to demean” way to dismiss someone. As a result, he claims, he has suffered depression as a result of the humiliation and mental anguish he experienced.
Former SBC research analyst Jack Dzierwa is also suing, reports the Post. Dzierwa was dismissed in October 2002. Like Moskalewicz, Dzierwa charges he was fired without cause, proper notice, or adequate compensation.
But the complaint also suggests that the firm may have been engaging in unethical behavior. In Dzierwa’s suit, he claims he was fired about two months after telling his bosses in New York that he was “directed to do certain things which were clearly unethical and inappropriate” while working as a research analyst at Salomon’s London offices.
In early September 2002, Dzierwa says he met with Kevin McCaffrey and Jeff Waters, who headed equity research. In that meeting, he claims he mentioned “unethical and inappropriate” activities in London, but offered no specifics. McCaffrey and Watters didn’t ask for details, but appeared “very uneasy,” Dzierwa claims.
McCaffrey was Jack Grubman’s boss at Salomon. Grubman had resigned from his job only a month before the alleged Dzierwa/McCaffrey meeting took place. Grubman, as you recall, quit his job after reports began circulating that he touted some stocks solely to generate investment banking business for the firm.
Salomon has yet to file a statement of defense in either case, according to the Post.