Legal News

U.S. Supreme Court Extends the Scope of Whistleblower Law in Mutual Funds to Include Law Firms
Download PDF
1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)
Loading...

The U.S. Supreme Court held this Tuesday that the application of the Sarbanes-Oxley whistleblower provisions also protects privately held contractors and subcontractors of a company from retaliation. The court made it clear that the rules also apply to contractors like law firms and auditors. However, with power comes responsibility and the recent broadening of scope may also broaden the accountability of contractors in the mutual fund industry.

Law firms and auditors were specified by the way Justice Ruth Bader Ginsburg framed her question on the issue. She asked whether the whistleblower protections “shield only those employed by the public company itself, or does it shield as well employees of privately held contractors and subcontractors—for example, investment advisers, law firms, accounting enterprises—who perform work for the public company?” And according to her opinion, the answer was, “yes.”

  
What
Where


Ginsburg opined that without such protections accountants and lawyers would be vulnerable under the provisions of the Sarbanes-Oxley rules that were created after the collapse of Enron. She mentioned that the Congress had responded after learning that employees of Enron and its accounting firm Arthur Andersen had faced retaliation for trying to report misconduct.

The justices voted 6-3, and dissenting justice Sonya Sotomayor observed that under the interpretation of the majority, “the Sarbanes-Oxley Act authorizes a babysitter to bring a federal case against his employer—a parent who happens to work at the local Walmart (a public company)—if the parent stops employing the babysitter after he expresses concern that the parent’s teenage son may have participated in an Internet purchase fraud. And it opens the door to a cause of action against a small business that contracts to clean the local Starbucks (a public company) if an employee is demoted after reporting that another nonpublic company client has mailed the cleaning company a fraudulent invoice.”

The case is Lawson v. FMR, U.S. Supreme Court, No. 12-3.

Get JD Journal in Your Mail

Subscribe to our FREE daily news alerts and get the latest updates on the most happening events in the legal, business, and celebrity world. You also get your daily dose of humor and entertainment!!






 

RELEVANT JOBS

Legal Extern / Litigation Law Clerk

USA-VA-Alexandria

Old Towne Associates, P.C. (Alexandria, VA) Legal Extern Openings - Class of 2021 and 2022 ...

Apply now

Legal Assistant

USA-GA-Atlanta

Thomas | Horstemeyer, a boutique intellectual property law firm in Atlanta, is seeking an experience...

Apply now

Personal Injury Attorney

USA-PA-Philadelphia

CAREER OPPORTUNITY   The Quinn Law Group is looking for an exceptional candidate to join ...

Apply now

Criminal Law Attorney

USA-MO-Springfield

AV rated criminal defense law firm seeking full time attorney with at least 1-3 years of experience ...

Apply now

BCG FEATURED JOB

Locations:

Keyword:



Search Now

Mergers and Acquisitions Associate Attorney

USA-CA-San Diego

San Diego office of a BCG Attorney Search top ranked law firm seeks Mergers and Acquisitions Associa...

Apply Now

Senior Wealth Management Group Associate Attorney

USA-CA-San Diego

San Diego office of our client seeks Senior Wealth Management Group Associate Attorney with 9 years ...

Apply Now

Bankruptcy Associate Attorney

USA-CA-Los Angeles

Los Angeles office of a BCG Attorney Search top ranked law firm seeks Bankruptcy Associate Attorney ...

Apply Now

Most Popular

SEARCH IN ARCHIVE

To Top