Subsidiary Whistleblowers Gain Retroactive Protection

Reuters reports that after much court review, Judge J. Paul Oetken of the U.S. District Court - Southern District of New York ruled that the protection provided to whistleblowers of corporate subsidiaries, a provision within the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank Act"), applies retroactively to the Sarbanes-Oxley Act of 2002. In 2010, Congress passed the Dodd-Frank Act meant to further regulate the financial industry and prevent another crisis by amending the Sarbanes-Oxley Act to expand the protected whistleblower population from employees working directly with the corrupt corporation, to employees working in subsidiaries that report on the fraudulent actions of the parent company. The relevant whistle blowing section of the Dodd-Frank Act protects persons who have original knowledge of security fraud and report it to the government for a financial reward.

The court determined that Congress must have intended to provide protection to all employees with original knowledge of security violations, not just those working directly with the parent company, because security fraud was known to occur within subsidiaries, not just parent entities, and Congress never made a distinction between employees of the parent or subsidiary. Finding that Congress likely intended to protect whistleblowers working in subsidiaries back in 2002, subsidiary employees who reported on their employer and suffered reprisal between 2002 and 2010 will retroactively gain the protection of the whistleblower provision stated in the Sarbanes-Oxley Act.

This retroactive application allows protection for employees like Phillip Leshinsky who was terminated in July 2008 and brought a wrongful termination lawsuit against his company alleging that his termination was due to whistleblowing on his company for using fraudulent information related to a contract bid for Metropolitan Transportation Authority in New York City.

If you have witnessed your company make fraudulent claims to the United States government, you may have a qui tam lawsuit and be entitled to a share in any recovery obtained by the government. The skilled Attorneys at Weinstein Caggiano PLLC devote their practice to helping whistleblowers navigate qui tam claims. From our offices in Seattle, we represent clients nearby in the Pacific Northwest, including Washington, Oregon, Idaho and Alaska, as well as others across the nation.

Weinstein Caggiano PLLC is here to answer your questions about whistleblowing, about the qui tam claim legal process and about us. Call us today at 800-406-1690 or complete the Contact form on this page for a free consultation with a lawyer today.