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In Wadler v. Bio-Rad Laboratories, Inc., No. 17-16193, 2019 WL 924827 (9th Cir. Feb. 26, 2019), the United States Court of Appeals for the Ninth Circuit held that statutes, including the Foreign Corrupt Practices Act (“FCPA”), do not constitute “rule[s] or regulation[s] of the Securities and Exchange Commission” (“SEC”) for purposes of determining whether an employee engaged in protected activity in a whistleblower claim under Section 806 of the Sarbanes-Oxley Act of 2002 (“SOX”).  This decision clarifies the proper application of the express statutory language of Section 806.
Continue Reading Ninth Circuit Holds That Statutes Do Not Constitute “Rules or Regulations of the SEC” for Purposes of Sarbanes-Oxley Act Whistleblower Claims

In In re Lehman Bros. Holdings Inc. 855 F.3d 459 (2d Cir. 2017), the United States Court of Appeals for the Second Circuit affirmed a district court order subordinating the claims of former Lehman Bros. (“Lehman”) employees for undelivered equity-based compensation to those of the defunct bank’s general creditors. The Court determined the compensation benefits were securities that had been purchased by the former employees when they agreed to receive them in exchange for their labor and the asserted damages arose from those purchases, requiring the claims’ subordination under the Bankruptcy Code. The decision is important to employees and employers weighing the value of hybrid compensation packages and creditors seeking to safeguard their priority position among bankruptcy claimants.  
Continue Reading Second Circuit Holds that Contingent Equity-Based Compensation of Former Lehman Employees are Subordinate to Creditor Claims

In Lawson v. FMR, LLC, No. 12-3, 2014 WL 813701 (U.S. Mar. 4, 2014), the Supreme Court of the United States, in a 6-3 decision reversing the United States Court of Appeals for the First Circuit, held that the whistleblower protection provision in Section 806 of Sarbanes-Oxley Act of 2002, 18 U.S.C. § 1514A (“SOX”), protects employees of publicly traded companies and employees of privately held companies that are contractors or subcontractors for a covered publicly traded company.  In reaching this decision, the Supreme Court has clarified the definition of “covered employee” under the whistleblower provisions of SOX and expanded the scope of SOX.
Continue Reading United States Supreme Court Holds That Section 806 of the Sarbanes-Oxley Act Extends to Employees of Private Companies Who Are Contractors or Subcontractors for Covered Public Companies

In Lawson v. FMR LLC, No. 10-2240, 2012 U.S. App. LEXIS 2085 (1st Cir. Feb. 3, 2012), the United States Court of Appeals for the First Circuit, in a case of first impression, held that the whistleblower provision in Section 806 of Sarbanes-Oxley Act of 2002, 18 U.S.C. § 1514A (“SOX”), applies only to employees of public companies, and does not protect employees of private companies who are contractors or subcontractors for the covered public company. This decision, the first decision by a United States Court of Appeals on this issue, helps clarify the definition of “covered employee” under whistleblower provisions of SOX.
Continue Reading First Circuit Holds That Section 806 of the Sarbanes-Oxley Act Extends Only to Employees of Public Companies, Not Employees of Private Companies Who Are Contractors or Subcontractors for Covered Public Companies