Ex-Cambridge Recruiter Says He Was Fired for Whistleblowing
A former recruiter is seeking $2.4 million from Cambridge Investment Research over allegations that the independent broker-dealer retaliated against him for complaining that a senior executive who sat on the firm’s three-person board had a conflict of interest in helping to administer the firm’s $20 million 401(k) plan through another company he owned.
In a claim statement filed Wednesday seeking an arbitration hearing before a three-person Financial Industry Regulatory Authority panel, Jeffrey Evanello said Iowa-based Cambridge turned down recruiting candidates in order to cut his compensation and ultimately fired him after he elevated his concerns to senior members of the firm’s legal and compliance department.
Evanello, 52, joined Cambridge in 2011 as a mid-level executive running its client solutions unit before switching to lead recruiting in its seven-state West region. His problems began after he questioned the propriety of the private firm’s unannounced decision in 2014 to install its own subsidiary as investment advisor to its corporate 401(k) plan and to move third-party administrative (TPA) services for the plan to a firm owned by Dan Sullivan, Cambridge’s executive vice president in likely violation of the Employee Retirement Income Security Act.
“Rather than correct the situation once Mr. Evanello brought it to light, Cambridge’s senior executives and Board of Directors instead embarked on an orchestrated scheme of retaliation that culminated in Cambridge wrongfully terminating Mr. Evanello,” the complaint states.
Evanello, who lives in Phoenix and now runs practice development at Waddell & Reed, claims he was the victim of a “quintessential whistleblower retaliation” pattern.
Sullivan also sat on the acceptance committee that approved advisor candidates, according to the claim. “It became readily apparent to Mr. Evanello that he was being treated in a disparate fashion, as he saw Cambridge recruiters from other regions being permitted to onboard far less-qualified lateral candidates including some with checkered regulatory histories,” it says.
A spokeswoman for Cambridge, which has around 3,700 affiliated brokers, said the company was not aware of the filing. “As a matter of policy, we do not comment on speculation or pending matters,” she wrote in an emailed statement.
Evanello’s claim asserts that the firm deliberately fired just as an RIA team known as Protected Investors of America agreed to brings its $8 million of production to Cambridge after he had wooed them for six months. He would have received a commission of about $240,000 over three years if he had not been terminated, the complaint alleges.