A federal judge has refused to dismiss a whistleblower claim against Ohio Republican gubernatorial nominee Vivek Ramaswamy after a former executive at his investment firm alleged that Ramaswamy demanded she violate securities laws and participated in firing her when she refused.
U.S. District Judge Julien Xavier Neals issued the 24-page ruling Aug. 25 in Rosely v. Strive Asset Management, rejecting Ramaswamy’s attempt to dismiss an individual whistleblower-retaliation claim brought by former Strive executive Joyce Rosely.
The allegations recited by the court are explosive.
Rosely alleges that “almost immediately” after she began working for Strive in August 2022, Ramaswamy and Strive co-founder Anson Frericks demanded that she “violate applicable securities laws.”
She says she and another employee repeatedly objected — both to the demands being made of them and to securities-law violations they believed Ramaswamy and Frericks were committing themselves.
The court says Rosely alleges Ramaswamy exercised supervisory authority over her, personally received those objections and “participated in the decision to terminate” her employment after she refused his demands.
Ramaswamy asked the court to throw the claim against him out, arguing that the complaint did not show he was directly involved in Rosely’s firing.
Neals rejected that argument.
“The Court disagrees,” the judge wrote before laying out the allegations against Ramaswamy: that he supervised Rosely, demanded that she and another employee violate securities laws, heard their repeated objections and participated in the decision to fire her when she refused.
“Taking her allegations as true, Plaintiff sufficiently states a CEPA claim against Ramaswamy,” Neals wrote.
The court then denied Ramaswamy’s motion to dismiss the claim against him.
What Ramaswamy allegedly wanted employees to do
The lawsuit was first filed in 2023, when Ramaswamy was running for president and promoting Strive Asset Management as evidence of his ability to disrupt Wall Street.
Rosely served as Strive’s executive vice president and co-head of institutional sales and distribution. Strive was based in Ohio, while Rosely worked from New Jersey.
Her allegations went well beyond a vague disagreement over compliance.
Contemporaneous Forbes reporting on the complaint said Rosely accused Ramaswamy and Frericks of pressuring her to use sales materials that promised customers future investment returns and to allow employees who were not properly registered to make securities pitches to customers.
Rosely also objected to Ramaswamy’s social-media activity, which she believed amounted to unlawful securities sales, according to Forbes.
Those were not the only allegations of that kind coming from inside Strive.
Another former Strive employee, John Phillips, filed a separate lawsuit in 2023 alleging that Ramaswamy misrepresented Strive’s financial condition to employees and investors and that he too was pressured to violate securities laws. Phillips had left a position at JPMorgan to join Strive.
The Columbus Dispatch reported at the time that both former employees accused Ramaswamy’s firm of pushing workers toward conduct they believed violated federal securities rules.
Strive responded to the 2023 litigation by saying the company “intends to vigorously defend itself,” according to Forbes.
Ramaswamy argued the claim against him should be dismissed
The case eventually moved into federal court in New Jersey, where Strive, Frericks and Ramaswamy sought both to transfer the lawsuit to Ohio and to dismiss its claims.
A federal magistrate judge recommended in July 2024 that Rosely’s whistleblower claims against Strive and Ramaswamy be allowed to continue.
Ramaswamy objected.
His lawyers argued that Rosely had not alleged facts showing that he was directly involved in the decision to fire her, much less that he had done so in retaliation for whistleblowing.
Neals rejected that defense in last week’s ruling.
The judge pointed to four allegations in Rosely’s complaint:
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Ramaswamy exercised supervisory authority over Rosely;
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Ramaswamy demanded that Rosely and another employee violate securities laws;
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Rosely and the other employee repeatedly objected to the alleged unlawful conduct directly to Ramaswamy; and
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Ramaswamy participated in the decision to terminate Rosely after she refused the demands.
Those allegations are sufficient to pursue an individual claim against Ramaswamy under New Jersey’s Conscientious Employee Protection Act, the court ruled.
The state law, commonly known as CEPA, protects employees who report or object to workplace conduct they reasonably believe violates the law.
Judge: firing both employees who objected supports retaliation claim
The ruling also allowed Rosely’s broader whistleblower claim against Strive to proceed.
Ramaswamy and the other defendants argued that the roughly seven months between Rosely’s initial objections and her March 2023 firing was too long to support an inference of retaliation.
Neals again disagreed.
The court emphasized that Rosely alleges Strive fired not only her, but also another employee who had joined her in objecting to the alleged securities-law violations.
“According to Plaintiff, Defendants asked her and Nye to break the law; Plaintiff and Nye repeatedly refused to do so and complained to management; and Defendants fired Plaintiff and Nye seven months later,” the opinion states.
The judge found that firing both employees who allegedly objected was enough, at this stage, to support an inference that their whistleblowing played a role in the decision.
Some claims were dismissed. The securities whistleblower claims survived.
Neals did not hand Rosely a victory on every claim in her lawsuit.
The judge dismissed without prejudice her separate claims for retaliation and age discrimination under the New Jersey Law Against Discrimination, as well as the related individual-liability claim.
But the claims at the center of the securities-law allegations survived.
Count I, alleging whistleblower retaliation by Strive under CEPA, remains in the case.
Count IV, seeking to hold Ramaswamy and Frericks individually liable for that alleged retaliation, also remains.
Those are the claims directly tied to Rosely’s allegation that she was told to break securities laws, objected and was later fired.
Neals has not yet determined whether the underlying securities-law violations occurred. The Aug. 25 ruling settles the immediate legal question Ramaswamy put before the court: whether Rosely’s allegations against him were sufficient to survive dismissal.
The judge ruled that they were.
The allegations strike at the heart of Ramaswamy’s campaign résumé
The ruling lands in the middle of an Ohio governor’s race in which Ramaswamy has made his record as an entrepreneur and investor one of his central qualifications for office.
His own campaign biography calls him “one of the most successful business leaders of his generation” and describes his agenda for Ohio as “business-grounded.”
Strive is an important part of that record.
Ramaswamy co-founded the company in 2022 as an alternative to major asset managers such as BlackRock, arguing that Wall Street had abandoned its fiduciary responsibility to investors in favor of environmental and social politics.
He marketed Strive around a promise of putting financial performance and fiduciary responsibility first.
Now a former senior executive says that behind the scenes, the company’s own founders were demanding conduct she believed violated the securities laws governing the investment industry.
And a federal judge has refused to let Ramaswamy escape the resulting whistleblower case at the pleading stage.
This is not the first former Strive employee to make the accusation
Rosely’s accusations attracted national attention when the lawsuit was filed because another former employee was already making strikingly similar claims.
Phillips, a former Strive regional sales chief, alleged in his own lawsuit that Ramaswamy exaggerated Strive’s financial strength while recruiting workers and raising money and pressured employees to violate securities laws.
Forbes reported that Phillips alleged Ramaswamy misrepresented Strive’s finances to both employees and investors.
Phillips said he left a lucrative JPMorgan job after being told Strive was well financed and that Ramaswamy was committed to building the company. Ramaswamy left his executive role months later to run for president.
Rosely and Phillips were both terminated during the same March 2023 company restructuring.
Two former employees, in separate lawsuits, accused the company Ramaswamy built to reform Wall Street of pressuring employees to break Wall Street’s rules.
The case against Ramaswamy is moving forward
Three years after Rosely first sued, Ramaswamy tried to get himself out of the case.
He failed.
The Aug. 25 ruling leaves the core whistleblower claims against Strive and against Ramaswamy personally intact and clears the way for the litigation to continue.
The allegations now attached to Ohio’s Republican nominee for governor are stark: a former senior executive says Ramaswamy personally demanded conduct that violated securities laws, heard employees repeatedly object and participated in firing her after she refused.
Ramaswamy built his political career by arguing that his success in business proves he is qualified to run government.
A federal court has now ruled that a whistleblower accusing him of demanding securities-law violations gets to keep making her case.
