Official at Utah’s securities cop eyes suit against regulator, sources say

George Robison, the director of licensing for the Utah Division of Securities, is discussing taking legal action against his employer for allegedly retaliating against him because he participated in an audit of the division, according to people familiar with the situation.

The audit was initiated by state Assemblyman Jim Bird in response to adviser complaints about overly aggressive enforcement agents and huge delays in getting hearings,

Completed in July of 2008, the investigation concluded that that the division was being grossly mismanaged — resulting in long procedural delays, internal conflicts and poor communication, both internally and with outside investigations of financial services professionals. As the audit was being conducted, division director Wayne Klein resigned.

Since the audit took place, a number of employees, including Mr. Robison, have been subject to retribution for participating in the audit, people familiar with the situation claim. “There have certainly been allegations from various folks at the division that there have been reprisals and retaliation for cooperating with the legislative audit,” said a person familiar with the situation, who asked not to be identified.

Mr. Robison is discussing taking legal action or going public with his experience, that source said. Mr. Robison and his attorney, Randall K. Edwards, declined to comment.

Jennifer Bolton, a spokeswoman for the Securities Division, said the agency “openly encouraged” all of its employees to comply with the audit.

In a Nov. 1, 2007, e-mail, Mr. Klein instructed employees to “be as helpful as you can” with the audit.”

Insiders said, however, that in May 2007, even before the audit started, Mr. Robison was being targeted for coming up against Mr. Klein. Specifically, insiders claim Mr. Robison was stripped of his responsibilities as director of compliance and licensing, and was later named merely director of licensing.

In July 2007, Mr. Robison appealed to the Utah Career Service Review Board, but it rejected his claim, stating that the change in his responsibilities was a restructuring, not a demotion.

Mr. Robison’s role changed as a direct result in the division’s decision to restructure its compliance and licensing sections to “address conflict-of-interest issues which had been brought to the division’s attention,” Ms. Bolton wrote in an e-mail.

But the problems between Mr. Robison and the division have continued. Most recently, Keith Woodwell, its director, withheld three days of Mr. Robison’s pay for causing morale problems, sources said. Mr. Robison has filed an appeal with the Career Service Review Board.

If that doesn’t work, he will turn to the courts, insiders said.

E-mail Jessica Toonkel Marquez at [email protected].