JP Morgan Chase & Co is facing a lawsuit filed by a former employee alleging that the company had forced him out of his job after he discovered questionable transactions made within the accounting and management unit.

The transactions in question involve those made under Highland Capital Management, a Texas-based hedge fund company that receives support from JP Morgan.

In a 12-page complaint with the Superior Court in Stamford, ex-employee Kevin Dillon said that the firm's supervisors singled him out for blowing the whistle on a series of questionable practices. Dillon alleged that Highland "artificially manipulated" the net asset value of certain funds and re-allocated poor performing investments under a so-called "Crusader Fund", which he then communicated with his superior.

"To (Dillon's) surprise, the supervisor indicated that the defendent was aware of Highland's improper practices and that nothing would be done to remedy the issue," the file was quoted as having written. It did not specify the supervisor's name, nor was Highland Capital identified as a defendant in the lawsuit.

Highland has released a statement denying the allegations.

"Highland Capital Management is not a defendant in the case and unfortunately, appears to be a pawn in a lawsuit by a disgruntled JP Morgan employee against JP Morgan," Highland wrote. "As it relates to Highland, the plaintiff's comments are entirely false and misleading. Highland will consider whether further action is required against the plaintiff in response to these potential defamatory statements."

Dillon is seeking unspecified compensatory and punitive damages in the lawsuit in excess of $15,000.

The Securities and Exchange Commission has declined to comment on the matter.