Under SOX, employers are strictly prohibited from retaliating against employees who report illegal or unethical conduct. Employees are also protected when making disclosures about shareholder fraud or violations of SEC rules and regulations.
SOX Protects Whistleblowers
Examples of whistleblower activities protected under SOX include:
- Reporting an employer’s failure to disclose accurate financial statements to potential investors
- Reporting an employer’s improper entries on financial statements
- Exposing senior management’s alteration of delinquency reports
- Reporting an employer’s use of an unregistered broker to solicit investors in exchange for a commission
- Raising concerns about a supervisor’s practice of backdating letters of credit
- Committing other violations of the law and betraying the public trust
Who is Protected Under SOX?
Sarbanes-Oxley provides protection to any whistleblower who is an officer, employee, contractor, subcontractor, or agent of:
- Publicly traded companies
- Subsidiaries of publicly traded companies
- Nationally recognized statistical ratings organizations (NRSROs)
How are Employers Prohibited from Retaliating?
Sarbanes-Oxley prohibits employers from taking adverse employment actions against SOX whistleblowers including:
- Termination, discharge, or firing
- Suspension, threats, harassment, or other forms of intimidation
- Failing to hire or promote, or
- Any discriminatory action that would negatively impact the terms and conditions of the whistleblower’s employment
What Can Whistleblowers Recover?
If your employer violates the Sarbanes-Oxley Act you may be entitled to receive:
- Back pay for lost wages
- Front pay for future lost wages
- Compensatory damages
- Litigation costs and attorney fees