A former employee has filed a lawsuit against Flagstar Financial, Inc., and its director, Alessandro DiNello, alleging retaliatory termination following whistleblower activities and breaches of employment contract terms.
According to the lawsuit, plaintiff Ross Marrazzo joined New York Community Bancorp (NYCB) in 2022 as the Enterprise Chief Compliance Officer and reported directly to the bank's president and CEO. In early 2024, he began reporting to DiNello, who was then executive chair, president, and CEO of the bank. Marrazzo claims he uncovered money laundering activities involving a client known to DiNello. He alleges that, despite evidence of illegal structuring of deposits by this client, DiNello resisted closing the account and suggested warning the client about flagged transactions.
The complaint further states that Marrazzo discovered DiNello had discussed sensitive company information during a Zoom meeting while another employee was present in an inappropriate setting. Marrazzo asserts that although an external investigation was conducted by Cravath, Swaine & Moore LLP at his request, no disciplinary action was taken against DiNello.
Marrazzo alleges that his termination occurred while he was investigating suspicious financial transactions linked to DiNello. These transactions, according to the complaint, raised concerns about potential violations of NYSE rules and insider trading laws. Marrazzo claims he was awaiting critical information from other banks under USA PATRIOT Act provisions when he was dismissed.
In addition to retaliation claims under Section 806 of the Sarbanes-Oxley Act for protected whistleblower activities, Marrazzo also alleges breach of contract regarding unpaid severance due upon his termination without cause before June 14, 2025. Marrazzo requests reinstatement with seniority status intact or, alternatively, back pay, including bonuses and non-cash compensation such as stock options. He also seeks damages for lost wages, reputational harm, and other compensation.
The plaintiff is represented by attorneys Michael Willemin and William R. Baker of Wigdor LLP. The case was filed in the United States District Court for the Eastern District of New York under Case ID 2:25-cv-04183.