Whistleblower Protection Blog : Whistleblower Lawyer & Attorney : National Whistleblower Legal Defense and Education Fund : Whistleblower Protection, Fraud Claims : Washington DC

The Wall Street Reform bill, recently reported out of conference, includes a number of provisions designed to protect employees who report fraud in the commodity and stock exchanges.  The bill includes two qui tam provisions that protect whistleblowers who disclose “original information” concerning major fraud.

The bill overturns judicial precedents under the Sarbanes-Oxley Act that restricted jury trials and exempted subsidiaries. For the first time employees at “nationally recognized” “statistical rating organizations” such as Moody’s and Standard & Poor’s, have whistleblower protection.

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Today the Supreme Court, by a 5-4 vote, held that one provision of the Sarbanes-Oxley Act (SOX) is unconstitutional.  However, it also held that this one provision is "severable" so that the other provisions of SOX, including the whistleblower protection, are still in force.  The case is Free Enterprise Fund v. Public Company Accounting Oversight Board, No. 08-861 (June 28, 2010). The unconstitutional provision of SOX limited the president's power to remove members of the Public Company Accounting Oversight Board.

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The Swiss parliament finally approved the deal made between UBS and the U.S. government that requires UBS to turn over the names of 4,450 U.S. citizens who held accounts at the Swiss bank. The NWC issued the following release:

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National Public Radio (NPR) is reporting that a federal administrative judge has ordered that the Massey Coal Company temporarily reinstate whistleblower Ricky Lee Campbell while his retaliation case is pending.  Campbell drove coal shuttle cars and bolted mine roofs at the Upper Big Branch and Massey's Slip Ridge Cedar Grove mine.  He complained about problems with the brakes and power pedals.  He was fired before the April 5 explosion killed 29 of his coworkers.

The Federal Mine Safety and Health Act, 30 U.S.C. § 815(c), contains one of the best preliminary reinstatement provisions for whistleblowers.  Unless the administrative judge finds that the complaint is frivolous, then the law requires that the whistleblower get a preliminary reinstatement order to keep working while the case proceeds. That is the order Campbell has just received.

The Mine Safety and Health Act has a short statute of limitations, though -- just sixty (60) days.  This type of unevenness (laws strong on some points and weak on others) shows why we need a comprehensive whistleblower law that will give all whistleblowers the benefits of modern whistleblower laws.  Massey, meanwhile, is promising to appeal the order reinstating Campbell.

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*This post was drafted by Meryl Grenadier (NWC fellow)

In the past 24 hours there have been significant developments in the case of UBS whistleblower Bradley Birkenfeld. Three years ago, the former UBS banker provided the U.S. government with detailed information on how to identify the names of 19,000 American citizens who held illegal secret bank accounts at UBS bank in Switzerland (read the letter from Mr. Birkenfeld's attorneys outlining this information here). He reported the largest tax fraud scheme in history, and for the first time there was a crack in the vault of Swiss bank secrecy.

Bradley Birkenfeld also warned that Swiss politicians would do everything in their power to protect Swiss bank secrecy and block the release of UBS client information. This prediction became reality yesterday when the Federal Assembly of the Swiss parliament rejected a part of the deferred prosecution agreement between UBS and the U.S. Department of Justice. This part of the agreement requires UBS to turn over the names of 4,450 American tax criminals by August 20 of this year, a small fraction of the 19,000 clients.

In response to the vote, Senator Charles Grassley sent a letter to the U.S. government, expressing his outrage at the mishandling of information provided by Mr. Birkenfeld and the misguided reliance on the Swiss government for UBS USA information. Senator Grassley wrote (read the full letter here):

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Last week, the Sixth Circuit U.S. Court of Appeals stayed George Fort's preliminary order of reinstatement. Tennessee Commerce Corp. fired Fort last year after he sent a letter to the company's audit committee about failures in the bank's internal controls. Fort filed a whistleblower complaint under the Sarbanes-Oxley Act (SOX). I reported here about how the Occupational Safety and Health Administration (OSHA) issued a preliminary order requiring TCC to immediately reinstate Fort to his former position.

The case deserves comment here about the importance of preliminary orders in modern whistleblower protections. TCC challenges the enforceability of such orders, and if it prevails, the result would be a serious setback for the whistleblower cause. Indeed, even the stay itself has taken the power away from OSHA's reinstatement order for George Fort. Still, whistleblower advocates need to know that the Sixth Circuit has issued a fairly rapid briefing schedule. Hopefully, the stay will not be in effect for long and this issue might be resolved in favor of OSHA's power to enforce preliminary reinstatement orders.

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