U.S. District Judge J. Paul Oetken recently issued a ruling strengthening corporate whistleblower protections. The case before Judge Oetken was Leshinsky v. Telvent GIT SA et al, U.S. District Court, Southern District of New York, No. 10-04511. It involved Phillip Leshinsky, who had worked for the non-public Caseta subsidiary of Telvent GIT (a Spanish company), and sued over his alleged wrongful termination in July 2008. The court held that the Dodd-Frank financial reform act provides protection to employees of subsidiaries as well as those who work directly for the parent companies, and that the protection applies retroactively to cases that predate the enactment of Dodd-Frank.
Leshinsky alleged he was fired in retaliation for objecting to a fraudulent scheme in connection with Caseta's bid for a Metropolitan Transportation Authority contract in the New York City area. Telvent denied that Leshinsky was fired because of whistleblowing activity, and denied the existence of the alleged scheme to defraud the MTA.
Without deciding the merits of the case, Judge Oetken stated that Congress considered it important to protect whistleblowers in order to root out financial fraud within "large, complexly structured" companies. Judge Oetken wrote: "In light of the fact that corporate malfeasance can -- and often does -- occur within subsidiaries of a public company, and that such malfeasance was precisely what precipitated the passage of Sarbanes-Oxley, it is certainly reasonable to infer that, in enacting whistleblower protections, Congress intended to protect the employees of a corporation's subsidiaries in addition to employees of the parent itself." Judge Oetken concluded: "[I]t seems quite unlikely" that Congress would distinguish between employees of parents and subsidiaries, "even though the consequences of his reporting misconduct would be exactly the same in both situations."
This is another breath of fresh air for whistleblowers, who need as much protection as they can get from corporate retaliation. The whistleblower program, a product of Dodd Frank legislation, may be the best strategy the SEC has deployed since it has been formed. People now have an incentive to report fraud. The tipsters can remain confidential and justice can be served at the same time through attorney representation. Robert Pearce, a former SEC Enforcement Division attorney, has close ties with the Division and his firm is well equipped to represent confidential informants and secure their reward for helping to protect the integrity of the financial markets!
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
Leshinsky alleged he was fired in retaliation for objecting to a fraudulent scheme in connection with Caseta's bid for a Metropolitan Transportation Authority contract in the New York City area. Telvent denied that Leshinsky was fired because of whistleblowing activity, and denied the existence of the alleged scheme to defraud the MTA.
Without deciding the merits of the case, Judge Oetken stated that Congress considered it important to protect whistleblowers in order to root out financial fraud within "large, complexly structured" companies. Judge Oetken wrote: "In light of the fact that corporate malfeasance can -- and often does -- occur within subsidiaries of a public company, and that such malfeasance was precisely what precipitated the passage of Sarbanes-Oxley, it is certainly reasonable to infer that, in enacting whistleblower protections, Congress intended to protect the employees of a corporation's subsidiaries in addition to employees of the parent itself." Judge Oetken concluded: "[I]t seems quite unlikely" that Congress would distinguish between employees of parents and subsidiaries, "even though the consequences of his reporting misconduct would be exactly the same in both situations."
This is another breath of fresh air for whistleblowers, who need as much protection as they can get from corporate retaliation. The whistleblower program, a product of Dodd Frank legislation, may be the best strategy the SEC has deployed since it has been formed. People now have an incentive to report fraud. The tipsters can remain confidential and justice can be served at the same time through attorney representation. Robert Pearce, a former SEC Enforcement Division attorney, has close ties with the Division and his firm is well equipped to represent confidential informants and secure their reward for helping to protect the integrity of the financial markets!
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.
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