SOX whistleblower protection covers
mutual fund industry
Washington, D.C. March 4, 2014. The
U.S. Supreme Court ruled today in Lawson v. FMR, LLC, that
contractors and subcontractors of publicly traded companies are fully
protected under the Sarbanes-Oxley Act for corporate whistleblowers.
Significantly, in today's decision the
Supreme Court explicitly held that investment advisors and other
"independent contractors" employed in the mutual fund industry
are fully protected under the Sarbanes-Oxley Act's whistleblower
provisions. The Supreme Court's ruling reversed a lower court
holding excluding the mutual fund industry from protection under
In her majority opinion, on page 20, Justice Ginsburg explained that her ruling "avoids insulating the entire mutual fund industry from" the corporate whistleblower law. Justice Ginsburg also explained that these mutual funds manage $14.7 trillion dollars, on behalf of "nearly 94 million investors."
Stephen M. Kohn, Executive Director of the National Whistleblower Center, released the following statement regarding the importance of this decision:
“This is a big win for corporate whistleblowers. This is a big win for every person who invests money through mutual funds. The Supreme Court closed a potentially devastating loop hole in corporate whistleblower protection. By ruling that contractors and subcontractors of publicly traded companies are fully protected under the corporate whistleblower provisions, the Court has put an end to the popular shell game which large companies use try to silence whistleblowers.”
The National Whistleblower Center filed
a friend of the court brief before the Supreme Court in this case and
has been instrumental in defending the Sarbanes-Oxley Act from
corporate attempts to undermine its effectiveness.
Mr. Kohn is available for further
comment on this decision. Email firstname.lastname@example.org
to set up an interview.
Read the decision: Lawson v. FMR, LLC
Washington, D.C. February 26, 2014. In an exclusive report, The Washington Times reports that important information regarding the FBI’s counterterrorist achievements was never given to the members 9/11 Commission. The fact that the FBI had placed a human source in direct contact with Osama bin Laden in 1993 and ascertained that the al Qaeda leader was looking to finance terrorist attacks in the United States, was revealed in court testimony in a little-noticed employment dispute case.
The Agent responsible for finding and cultivating this source, and successfully thwarting terrorist threats in California, is FBI Supervisory Special Agent Bassem Youssef. Mr. Youssef was the FBI’s highest ranking counterterrorism official to “blow the whistle” on the FBI’s gross mismanagement of the War on Terror. He was also the highest-ranking FBI agent who is fluent Arabic. In spite of his qualifications, after the 9/11 attacks the FBI irresponsibly questioned his loyalties due to his national origin and blacklisted him. When he alerted a Member of Congress and the Director of the FBI to the discrimination he faced, Mr. Youssef was subjected to more severe retaliation, including the denial of promotions, punitive transfers and stripping him of all his prior operational counterterrorism duties, which had resulted in the successful infiltration detailed in today’s Washington Times. The retaliation against Mr. Youssef continues to this day.
The National Whistleblower Center issued an Action Alert calling on President Obama to give credit to Supervisory Special Agent Youssef for his work in one of the most significant triumphs in the war on terror and to tell the FBI to stop the retaliation against him. Please join with the NWC and take action on this critical issue.
Read: EXCLUSIVE: FBI had human source in contact with bin Laden as far back as 1993
Washington, D.C. Feburary 20, 2014. Today the Securities and Exchange Commission filed an extensive brief and position statement before the U.S. Court of Appeals for the Second Circuit urging the court to fully protect whistleblowers who make internal disclosures exposing fraud against investors and other violations of securities laws. Linked here are a copy of the SEC's brief and a copy of a statement by Sean McKessy, Chief of the SEC Whistleblower Office. The brief was filed in the case of Liu Meng-Lin v. Siemens AG, case number 13-4385.
Stephen M. Kohn, Executive Director of the National Whistleblower Center, released the following statement regarding the SEC's action:
"The brief filed today by the SEC marks a fundament shift in the position of the Commission and the whistleblower community. The Commission is backing up its words with action. The Commission's rules recognize the importance of protecting employees who report fraud internally to managers. Practically speaking, most fraud is disclosed through the chain of command and retaliating against employees who report internally has a devastating impact on the enforcement of laws designed to protect shareholders from the unscrupulous wolves of Wall Street.
In filing a powerful and well written position statement supporting whistleblowers who report fraud internally, the SEC is backing up its rules with strong legal action. The SEC has done the right thing in advocating for justice in a whistleblower retaliation case."
Washington, D.C. February 6, 2014. NWC Executive Director,
Stephen Kohn, was a guest panelist at a forum regarding "Accountability in
Government" held by the Department
of State's International Visitor Leadership Program. Representatives of 19
countries including, Belize, Botswana, Brazil, Cambodia, Croatia, Estonia,
Ethiopia, Fiji, Ghana, India, Iraq, Jordan, Latvia, Lesotho, Macedonia,
Nigeria, Slovakia, Tanzania, and Venezuela attended the program.
Mr. Kohn's presentation,"Whistleblower Protection: Key To
Transparency and Accountability" is linked here. In his presentation, Mr. Kohn stressed the need for increased
international whistleblower protections and how NGOs and citizens of foreign
countries can use the new protections created under the Foreign Corrupt Practices
Act to battle corruption.
Kohn stated, "The Foreign Corrupt Practices Act enhances the ability of citizens
and NGOs to prevent bribery of government officials." He also urged the
representatives to carefully review Chapters 6, 7, 8 and checklist 7 in The Whistleblower’s Handbook for
potential international application.