In response to a string of highly publicized corporate accounting scandals, the U.S. Congress enacted the Public Company Reform and Investor Protection Act of 2002, commonly known as the Sarbanes-Oxley Act. This Act includes a new provision to protect whistleblowers by prohibiting retaliation against employees of publicly traded companies who report fraudulent activity.
Specifically, publicly traded companies are subject to liability under 18 U.S.C. Section 1514A if they commit retaliatory acts against an employee for reporting or assisting in an investigation of fraud or other securities violations. The act prohibits a broad range of retaliatory activities against the employee, including discharge, demotion, suspension, threats, harassment, or any other form of discrimination.
The Sarbanes-Oxley whistleblower provision applies to certain types of publicly traded companies, which are registered or required to file reports under federal securities laws. In addition, Sarbanes-Oxley may apply to some subsidiary corporate entities, which do not themselves fall into the covered categories, if the parent corporation is covered.
Sarbanes-Oxley’s whistleblower provision protects employees who report activity they reasonably believe to be illegal, even if a court later determines that the reported behavior did not violate any laws.
This protection encourages employees to report suspicious activity, without fear of retaliation, if there turns out to be a legitimate explanation.
Victims of retaliation who seek to assert their rights under Sarbanes-Oxley must observe certain procedures. The statute of limitations is particularly important; employees must file a complaint with the Department of Labor within 90 days of the retaliatory act, and this time limit can only be extended under limited circumstances. After receiving a complaint, the Department of Labor will inform the employer of the allegations, conduct an investigation, and issue written findings. Either party may challenge the written findings and seek administrative review.
If you work for a publicly traded company and have observed activity that you believe is fraudulent, please contact us to arrange a consultation. We can help you understand your rights and decide when and how to report the problem.
Contact The Rubin Law Corporation of Los Angeles and Beverly Hills today by calling us at 310-385-0777, or you can schedule a consultation via e-mail.
“Given the seriousness of my SEC and Sarbanes-Oxley issue, it was a pleasure to have Steve Rubin as my lawyer. I was scared about SEC charges, possible criminal charges, what my career as a Vice President of Finance would evolve into as a whistleblower, and if I would ever work again going up against a powerful corporation with deep connections.
But Steve was able to provide immediate and re-assuring legal advice, which put me at ease. One of the main reasons I chose Steve was that he believed in what I was doing and why I was doing it. This was not just a generic legal claim, but to my wish to fulfill my fiduciary duties as a leader in the community.
Steve was very knowledgeable in this area of the law. Which was very comforting since most lawyers I connected with before Steve really did not have a good idea how to approach my issue and to them seemed like just a learning experience. Steve knew how to tackle my convoluted issues very quickly and kept me constantly in-the-loop as things progressed.
I was always able to get a hold of him and his assistant, Bic, when I needed him; which was great since I was panicky for months as we approached settlement. Given his many years of expertise and knowledge of the law, Steve was able to predict the best possible outcomes of my case. Thus allowing me to make the best choice for my situation.”