Sarbanes-Oxley (SOX) FAQ

In 2002, Congress passed the historic Sarbanes-Oxley Act, which protects employees of publicly traded companies who report violations of Securities and Exchange Commission regulations or any provision of federal law relating to fraud against the shareholders. Whistleblowers must be aware that the Sarbanes-Oxley Act is a complex and lengthy piece of legislation. If, after reviewing this section, you believe that you may have an action arising under the Sarbanes-Oxley Act and need an attorney, please go to the NWC Legal Assistance Program and submit a confidential intake form for a free case evaluation.

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Q: What federal laws protect whistleblowers who report corporate fraud?

In 2002, Congress passed the historic Sarbanes-Oxley Act, which protects employees of publicly traded companies who report violations of Securities and Exchange Commission regulations or any provision of federal law relating to fraud against the shareholders.

Q: Who is a relator?

The “relator” is another word for whistleblowers. It originated in the False Claims Act whistleblower reward law signed by President Abraham Lincoln on March 2, 1863, during the Civil War. The term “relator” is the term used in the statute to identify the original source of the frauds against the government. The term “whistleblower” was not in use in 1863. Consequently, in modern whistleblower reward laws, the term “relator” is often used by the Courts and parties to signify a whistleblower.

Q: Who is protected?

Employees of publicly traded companies and contractors, subcontractors, and agencies of publicly traded companies.

Q: What is “protected activity"?

The Sarbanes-Oxley Act broadly defines protected activity to include reports made to federal regulatory and law enforcement agencies, Congress, an employee’s supervisor, and internal corporate investigators. The law also protects employees who participate or testify in SEC regulatory proceedings or other federal proceedings related to fraud against shareholders.

Q: What is illegal discrimination?

Adverse changes to the whistleblowers terms and conditions of employment are prohibited. This includes a wide range of actions from reprimands to termination and blacklisting.

Q: Where should complaints be filed?

US Department of Labor Office of the Assistant Secretary Occupational Safety and Health Administration - Room: S2315 200 Constitution Avenue Washington, DC 20210 202-693-2000

Q: What is the statute of limitations?

A complaint filed under the Sarbanes-Oxley Act must be filed with the Department of Labor in writing within 90 days of the time an employee learns that he or she will be, or has been, subjected to discrimination, harassment, or retaliation.

Q: What remedies are available to employees under the Sarbanes Oxley whistleblower law?

Employees who prevail are entitled to:

  • Reinstatement
  • Back pay with interest
  • Complete “make-whole” compensation (including restoration of seniority/sick leave, etc.)
  • “Special Damages” (for emotional distress and loss of professional reputation) *
  • Attorneys’ fees and costs
  • “Affirmative Relief” (such as requiring a letter of apology and formal posting of the decision)
*If an employee is seeking “special damages,” that relief should be requested in their initial complaint.

Q: Do other laws protect corporate whistleblowers?

Many other federal and state laws have been enacted to protect whistleblowers. The New Whistleblower's Handbook: A Step-by-Step Guide to Doing What's Right and Protecting Yourself is the first-ever consumer's guide to whistleblowing. It contains thirty clear and comprehensive rules that fully explain how to effectively blow the whistle. This book is also available directly from the publisher, or at a public library. It is very important that you review this resource in order to determine what laws may protect you and whether you need to take immediate action to protect your rights. For more information about this and other whistleblower publications, please visit the National Whistleblowers Center’s Book Store

Q: How can I get help?

If you need additional help or want to contact an attorney, please fill out a confidential intake form. You can also visit the NWC Legal Assistance Program page.

For additional information on qui tam and the False Claims Act please read Rules 1, 17, abd 18 and review Checklists 2 and 5 published in The New Whistleblower's Handbook: A Step-by-Step Guide to Doing What's Right and Protecting Yourself (Lyons Press, 2017). An online resource for the Whistleblower handbook is available free of charge. It is indexed to the specific rules and contains links to the relevant statutes and key Sarbanes Oxley Whistleblower cases . The online resource is available here.

If you have a question for the author of The New Whistleblower's Handbook you can reach him at SK@KKC.com and submit your inquiry.

Please read the FAQ disclaimer.

The material in this FAQ may not reflect the most current legal developments. The content and interpretation of the law addressed herein is subject to revision. We disclaim all liability in respect to actions taken or not taken based on any or all the contents of this website or in this FAQ. Before acting on any information or material in this web site, we strongly recommend you seek professional legal attorney.

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