Reuters: Regulatory News: UPDATE 1-U.S. Supreme Court agrees to hear Fidelity whistleblower case

Reuters: Regulatory News Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

UPDATE 1-U.S. Supreme Court agrees to hear Fidelity whistleblower case May 20th 2013, 14:24 Mon May 20, 2013 10:24am EDT By Lawrence Hurley WASHINGTON May 20 (Reuters) - In a case involving whistleblowers at Fidelity Investments, the U.S. Supreme Court on Monday agreed to consider whether mutual fund employees are subject to the same whistleblower protections as workers at publicly traded companies. Two Fidelity whistleblowers asked the court to decide whether the Sarbanes-Oxley Act, which prevents public companies from retaliating against whistleblowers, applies to private companies serving under contract as advisers to public companies. Sarbanes-Oxley was enacted in 2002 after accounting problems brought down energy company Enron Corp and communications provider WorldCom Inc. Mutual fund companies have argued they should be exempt from the law because the funds themselves technically have no workers apart from their boards of directors and instead hire private management companies to invest their money. Fidelity is the second-largest mutual fund company in the United States, investing $1.7 trillion of U.S. investment assets. In the Fidelity case, plaintiff Jackie Lawson, who worked at Fidelity from 1993 until 2007, complained that she alerted supervisors to problems, including the alleged improper retention of $10 million of fees, only to be passed over for a promotion and threatened with punishment for insubordination. Another plaintiff, Jonathan Zang, who ran several mutual funds from 1998 to 2005, alleged Fidelity gave him poor reviews and fired him in retaliation for his complaint that a new pay plan for Fidelity portfolio managers inaccurately and illegally described how pay was calculated. Fidelity argued that Lawson and Zang worked for affiliates such as its Fidelity Management & Research arm, rather than a public company that Sarbanes-Oxley was meant to cover. In a 2012 ruling, the 1st U.S. Circuit Court of Appeals in Boston sided with Fidelity. The court noted that other whistleblower statutes in the Energy Reorganization Act and the Pipeline Safety Improvement Act specifically extend coverage to contractors, unlike Sarbanes-Oxley. The Securities and Exchange Commission and the Department of Labor supported Lawson and Zang, submitting briefs on appeal that supported the extension of whistleblower protections to mutual fund employees. U.S. Solicitor General Donald Verrilli filed a brief urging the court to wait for other cases to be decided before addressing the legal question. The Supreme Court will hear arguments and decide the case in the court's next term, which starts in October and ends in June 2014. The case is Lawson v. FMR, U.S. Supreme Court, No. 12-3. Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions