The Sarbanes-Oxley Act makes it illegal to retaliate against an employee who blows the whistle on potential shareholder fraud.
Recent case: Shawn Van Asdale was an intellectual property attorney for International Game Technology (IGT). IGT began merger discussions with Anchor Gaming, and Van Asdale was asked to review several of the casino game maker’s patents.
He discovered that a competitor sold a slot machine very similar to one of Anchor’s models. He ultimately concluded that Anchor’s patent was valid, and the merger went through.
Later Van Asdale discovered that Anchor hadn’t disclosed information that might have invalidated its patent. He told his supervisors that constituted stockholder fraud. IGT fired him.
He sued, alleging retaliation. The 9th Circuit Court of Appeals ruled that as long as Van Asdale reasonably believed he was reporting shareholder fraud, he was protected against retaliation. (Van Asdale v. International Game Technology, et al., No. 07-16597, 9th Cir., 2009)
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