Katz, Marshall & Banks partner David J. Marshall was interviewed by Law360 for an article about the Supreme Court ruling in Lawson v. FMR, LLC, which addressed the question of whether the anti-retaliation provisions of the Sarbanes-Oxley Act of 2002 (“SOX”) extended to employees of contractors and subcontractors of publicly traded companies. In an important victory for whistleblowers – particularly whistleblowers in the financial industry – the Court ruled that the SOX whistleblower protection provisions do cover employees of contractors and subcontractors of publicly traded companies. This decision was important because so many of the critical operations of publicly traded companies are handled by outside firms – e.g., Arthur Anderson and Enron – and it is imperative that those actors have the same protections as employees of the public company itself. This is especially true of mutual funds and other investment companies, which, like Fidelity Investments, which was the publicly traded company at issue in the Lawson case, often have no employees of their own.
In his interview with Law360, Mr. Marshall explained that “Clearly, the expansion that the defense bar has feared has now taken place. The exact limits of it are unknown, but what the Supreme Court held today opens up SOX protection to millions of employees around the country.” Mr. Marshall added that the Court’s opinion will protect the “rights and well-being of the investing public,” which can now rest easier with greater legal protections for those employees who may have the best knowledge of fraud.