Lawsuits may expand Sarbanes-Oxley
Friday, May 23rd, 2008Two lawsuits filed by former employees against Fidelity Investments may resolve a simmering dispute in the securities industry: Whether mutual fund employees are protected by a whistle-blower law adopted in the wake of corporate accounting scandals. The Sarbanes-Oxley Act does not specifically apply to the Fidelity Investments chairman’s firm and other privately held companies.
Congress gave whistle-blowers at public companies strong protections against retaliations when it passed the Sarbanes-Oxley Act in 2002 after the collapse of Enron Corp. and WorldCom. But the law does not specifically extend to privately held firms such as Fidelity that invest in public companies.
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