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