The Philadelphia Inquirer: Vanguard Whistleblower Lawsuit Goes to Mediation

The front page of The Philadelphia Inquirer’s business section on June 10, 2023, features an article from reporter Joseph N. DiStefano, “Vanguard and former tax lawyer are in mediation over wrongful termination lawsuit,” detailing the status of former Vanguard attorney David Danon’s whistleblower lawsuit against Vanguard.

The article states that Danon and Vanguard have agreed to mediate the whistleblower-retaliation lawsuit he filed against Vanguard alleging a wrongful termination. A May 26 order by U.S. District Judge Berle M. Schiller requires the two sides to update him on June 16 on their efforts with an independent mediator and to keep updating him once a month.  The case will be stayed during the mediation.

The lawsuit, with court filings starting in 2013, says that Danon reported to his Vanguard supervisors that he had found two potentially billion-dollar tax frauds at the Malvern-based investment giant:

  • Setting fees the company’s investor funds paid its own management company, so as to reduce its annual income tax obligations, which he said broke federal tax rules requiring a company to pay market prices for services from its own affiliates.
  • Stashing cash in a $2 billion “contingency reserve” that was neither shared with investors nor subjected to income taxes.

Danon said he was fired by Vanguard in retaliation, less than a month after contacting the SEC for the alleged illegal practices by Vanguard.

Edward T. Kang of Kang Haggerty represents Danon. The Inquirer article states: If the court found Danon went to the SEC with allegations of “illegal practices” before he was fired, Danon “would have viable claims under the Dodd-Frank Wall Street Reform Act,” which includes hefty rewards for whistleblowers, according to Kang.

If you were the victim of whistleblower retaliation or want to learn more about whistleblower actions, please contact the Kang Haggerty attorneys at The Whistleblower Advocates today.

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