Voya CFO Leaves, Whistleblower Lawsuit Stays
Voya Financial, Inc. (NYSE: VOYA) said yesterday that its chief financial officer, Ewout L. Steenbergen, has resigned and will be replaced next month by the company’s CEO of insurance solutions, Michael S. Smith. Separately, both men are mentioned in a whistleblower lawsuit filed in July by Mary Fay, former senior vice president and head of annuities products at Voya.
In a press release, Voya said Steenbergen is leaving the company “for another opportunity.” He has been an employee of Voya and its former parent company, ING Group, for 23 years. He was appointed CFO of ING U.S. in 2010 and shepherded the subsidiary through an initial public offering in 2013 and a subsequent re-branding as Voya Financial. His successor, Smith, joined the company in 2009 as CFO and chief insurance risk officer of the annuity business.
Fay joined ING U.S. in January 2012. She alleges in her complaint that problems began about a year later when she was asked to calculate the projected return on equity for a new product called Voya Lifetime Income Annuity. The company was two months away from going public, and Fay believed her projections would have a material impact on the content of the IPO prospectus. Using conventional methods, she and her team arrived at an estimate of 7.0% for the new product’s first-year ROE.
“Just plug it”
After presenting the results in a memo to her superiors, Fay received an email from Smith that she interpreted as dissatisfaction with the estimate, according to her complaint. Voya contends in ananswer that Smith was “generally OK” with the memo.
Fay’s immediate supervisor, president of annuities David Bedard, instructed Fay to “rework” the numbers, the complaint says. Fay and her team increased the first-year ROE to 8.0%, but Fay worried whether their methods complied with actuarial standards. Maliz Beams, CEO of ING Retirement Solutions, was still dissatisfied with the result, according to the complaint. Bedard told Fay the first-year ROE had to be at least 8.4% and instructed her to “just plug it” to arrive at the figure, the complaint says. Voya denies the allegations in its answer.
Fay and her team increased the projection to 8.3%, but Fay worried even more about their methods. Bedard asked Fay to revise her prior memo with the 8.3% number. Fay stalled for several days. Before she could deliver a memo, ING U.S. issued a press release announcing the new product, according to the complaint. In its answer, Voya says only a preview of the press release was distributed.
Afterward, Steenbergen emailed his subordinates to ask how the product had been approved, the complaint says, adding that neither Steenbergen nor ING U.S. CEO Rodney Martin had been consulted. Voya says in its answer that Steenbergen emailed to ask the subordinates’ opinion of the product.
The complaint says Bedard continued pressuring Fay not only to produce a revised memo but also to backdate it as if it had been prepared before the press release. Voya says in its answer that Bedard wanted the memo the reflect the date the team had reviewed the projections. Fay eventually produced a copy of the memo per Bedard’s specifications but voiced her disapproval, the complaint says.
Fay says in her complaint that after she resisted increasing the ROE, “ING’s senior leadership initiated a campaign to marginalize her.” She names Smith and Beams among those who turned a cold shoulder after previously taking an interest in her career. She claims she was excluded from meetings and events and that important projects were assigned to other employees–all of which Voya denies in its answer. Finally, she was fired in November 2013.
Bon voyage, Voya Financial
Two months before Fay’s termination, Bedard quit after only nine months at Voya, née ING U.S. He subsequently joined New York Life as CFO of its investments group. The following year, Beams unexpectedly resigned “to pursue other opportunities,” according to a press release. She did not immediately join another firm, and Voya did not hire a replacement until six months later. During the same year, Jamie Ohl, president of tax-exempt markets and a direct report to Beams, also resigned.
Fay began the process of exhausting her administrative remedies early in 2014. She filed a complaint pursuant to the Sarbanes-Oxley Act with the U.S. Department of Labor and received a right-to-sue letter in 2015. She sued Voya in July 2016, claiming the company had retaliated against her for making disclosures to senior management that were protected under the Dodd-Frank Act, the Sarbanes-Oxley Act, and Connecticut’s Free Speech Anti-Retaliation Statute. She is seeking economic and non-economic damages.
Voya asserts several affirmative defenses in its answer. The company says Fay did not engage in any protected activity and therefore cannot show a causal connection between such activity and any alleged retaliation. The company claims it fired Fay for legitimate reasons.