Wayne’s whistleblowing former Vanguard lawyer has found himself in a squeeze play, with the nation’s largest mutual-fund firm demanding the return of confidential documents and the Securities and Exchange Commission still undecided about whether it will step in and protect the now-unemployed David Danon.

“Vanguard intends to take all necessary and appropriate steps to protect its interests,” its law firm stated in a Wall Street Journal report, and the company “’reserves all of its rights to seek legal redress’ if the documents aren’t returned immediately.”

The documents form the basis for his allegations, and his SEC whistleblower claim — if he qualifies for protection — could net him a bounty of up to 30 percent of any sanctions collected; with his claim of $1 billion in back taxes, that could add up.

“’The question is whether lawyers are free to rat on their clients and profit thereby,’” another lawyer not involved in the case told WSJ. “In most states — including New York — ‘the answer is no.’”

Read more about Danon’s predicament and Vanguard’s demands in the Wall Street Journal here, and check out previous Chesco Business Today coverage of Danon’s lawsuit here and its implications within the industry here.

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