In-house counsel

Judge nixes Vanguard tax lawyer's whistleblower suit, says it violates legal ethics rules

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A former in-house lawyer for a mutual fund giant has lost his bid to collect whistleblower fees for his allegations that the company underpaid $1 billion in federal and state income tax over a period of decades.

Because attorney David Danon was still working in-house as counsel for Vanguard Group when he filed the New York state-court suit in 2013, doing so violated legal ethics rules concerning confidential attorney-client information, Justice Joan Madden said in a Friday written opinion.

Her ruling bans Danon from bringing suit again, but notes that tax authorities are not precluded from pursuing collection efforts against Vanguard, reports the Philadelphia Inquirer.

Madden made no finding concerning the merits of Danon’s whistleblower litigation.

A spokesman for Vanguard on Tuesday confirmed the dismissal of the suit but did not discuss it further, the Inquirer reports. A lawyer for Danon could not immediately be reached by the newspaper for comment.

Related coverage: “Vanguard tax lawyer says he was fired for persistent questioning; company says he violated privilege”

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