A senior legal counsel at Credit Suisse Asset Management (CSAM) Australia claims he was sacked for making a report which should have qualified for protection under Sarbanes-Oxley attorney reporting obligations, and is suing for damages in the Federal Court.

In a statement of claim lodged with the Court last month, Philip Johnson says that on November 24, 2004 he received in the course of his duties an unsigned form of termination of a sub-investment agreement, prepared by CSAM New York, which he believed had been unlawfully backdated to October 1, 2004. On February 8, 2005, Johnson said he advised CSAM New York of his concern and a week later received a re-drafted termination notice. This one was signed by then head of legal for traditional asset management in the Americas, Ajay Mehra, but Johnson claims it was again backdated to October 1, 2004. The sub-investment agreement in question was executed in October 2002, and involved CSAM Australia taking responsibility from CSAM New York for investment advisory services to a number of funds, including the Credit Suisse Japan Growth Fund, for an annual fee of US$480,000 from CSAM New York. The agreement could only be terminated after 60 days written notice, and Johnson believed the “;apparent purpose of the backdating was to create the false appearance of a termination 60 days after 1 October 2004, namely on 1 December 2004”;. Johnson conveyed his “;serious concerns”; about the backdating of the termination in a report to his immediate superior, then head of legal & compliance Annette Golden. Johnson said he requested Golden regard the report as complying with his obligations under the Sarbanes Oxley Act, whose section entitled “;Policies and Procedures for ‘Up the Ladder’ Reporting by Attorneys of Evidence of a Material Violation under the Final Rules of the US Securities & Exchange Commission”; was enshrined in the Credit Suisse Group’s own compliance policy. However on March 1, 2005, Johnson claimed Golden disclosed the report, and his status as maker of it, to Ajay Mehra. In doing this, Johnson alleges Golden contravened the ‘Maintaining Privilege’ section of the Sarbanes-Oxley Attorney Reporting Obligations, as well as the ‘Confidentiality’ section of the Credit Suisse Group code of conduct. Johnson claimed he tried to discuss the matter with Golden that day, but was told to “;get out”; of her office. He claims Golden added she was “;really pissed off”;. On March 8, 2005 Johnson disclosed his report and Golden’s alleged mishandling of it to CSAM Australia’s then CEO, Andrew McKinnon, and to then CIO Robert Mann. On March 22 he disclosed same to Credit Suisse’s then global head of legal & compliance, Agnes Reicke, and on March 23 disclosed same in a voicemail to then CEO of CSAM New York, Michael Kenneally. Johnson claimed all four reports above qualified for protection under the Corporations Act ‘whistleblower laws’, under Part 9.4AAA. Johnson was issued with a formal warning by Golden on March 16, 2005, and on March 24 claims his access to CSAM Australia’s offices and computer network was disabled. On April 6, he claims McKinnon informed him his employment had been terminated, effective April 1. Johnson claims Golden’s warning and his dismissal were a breach of his employment contract, which enshrined compliance with the Sarbanes-Oxley Attorney Reporting Obligations. These forbade any ‘adverse action’ against the maker of an ‘up the ladder’ report under that Act. The ‘whistleblower laws’ under the Corporations Act, to which CSAM Australia was beholden, offered similar protection. Johnson is suing for loss and damages. He claims he was unemployed for six months after his dismissal from CSAM Australia, and has since then “;been engaged from time to time on temporary contracts on substantially lesser remuneration compared to his earnings from the Respondent”;. He is claiming at the rate of his base salary while at CSAM Australia, $170,000 per year, and foregone performance bonus entitlements which he will further quantify when the trial proceeds. The matter is adjourned for further directions until October 3. CSAM Australia said its policy was not to comment on any matters before a court. At presstime it had not responded to Johnson’s statement of claim. Andrew McKinnon declined to comment. Annette Golden has left the industry to become a musician and could not be contacted. Philip Johnson is currently working for the International Monetary Fund on a project in Mongolia, and could not be contacted before presstime.

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