Will an Ex-Fidelity Advisor's Reg BI Suit Catch the SEC's Eye?

If that happens, the case could have implications for other financial services companies, Meyer suggested.

Private citizen whistleblowers extend the reach of federal agencies that lack adequate staff to regulate industry, he noted. If the SEC responds to Maeker's case by initiating its own investigation, that could indicate that it's going in a certain direction with its regular investigatory agenda, Meyer said.

"Does that give an indication of where the Biden administration is going with its securities policy? And that becomes important if this goes into a second Biden administration. If it's a second Trump administration, I wouldn't think the Securities Exchange Commission would investigate," he added.

Reason for Termination

A key question in the case will be whether Maeker can show he was fired for his whistleblowing and not for other reasons, as Fidelity contends.

Under the Sarbanes-Oxley Act, or SOX, the employee must prove their internal complaint was a contributing factor in their termination, Xu said. Companies can try to show there was a "clear and obvious reason" other than whistleblowing why they terminated an employee, he said.

Indeed, Fidelity reported to the Financial Industry Regulatory Authority, in 2022 that it fired Maeker over allegations he misrepresented interactions with clients and improperly used planning tools, inflating his performance metrics. 

Maeker responded that Fidelity's allegations were false, misleading "and intended to cause harm to my career," and that the company provided nothing in writing to corroborate them. 

"My manager and Fidelity took action against me after I made multiple written reports of Fidelity's and my manager's unethical business practices and Reg BI violations," Maeker told FINRA.

"Fidelity only took action against me after I did not give into pressure by my manager to put clients into investments that paid higher revenue when those investments were not in the clients' best interests," he added.

Maeker makes similar points in the lawsuit, noting he had been rated as successful or exceptional in performance reviews and received no warning memo or e-mail about the alleged policy violations. He also contends another advisor remains employed at Fidelity despite having forged a client's signature to expedite an annuity application.

"The fact is that Fidelity did not raise any policy violations or performance issues with Maeker until after his whistleblowing report," the lawsuit asserts.

The case will be decided on whether Maeker's alleged misconduct that Fidelity cites as cause for his dismissal warranted the firing, according to Tully Rinckey's Meyer.

Fidelity noted to ThinkAdvisor earlier in May that an Occupational Safety and Health Administration investigator had reviewed and dismissed a complaint by Maeker, finding the advisor "would have been removed from his role due to his misconduct regardless of his purported whistleblowing activity," and that Fidelity therefore did not retaliate against him.

Maeker's lawyer, Rogge Dunn, however, said the lawsuit is proceeding  "de novo," or afresh and separate from past proceedings, and that the OSHA finding was an initial decision by the investigator only, not a ruling on the merits.

Meyer predicted Fidelity will quickly move to a critique of Maeker in the workplace, "and he will have to fight through counsel to make this about Fidelity."

Maeker recently joined Texas Capital in Fort Worth as executive director, senior investment advisor for Private Wealth Advisors.

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