Sarbanes-Oxley Act (2002)
30 June 2006Sarbanes-Oxley Act (2002)
(Corporate and Criminal Fraud Accountability Act), 18 U.S.C. §1514A
Coverage and Prohibitions: The Sarbanes-Oxley Act was passed to help prevent corporate fraud and regulates how publicly traded companies report financial results and disclose executive compensation. The Act also prohibits retaliation against employees of publicly traded companies who complain about or disclose fraud by their employers. Specifically, employers (including their officers, contractors, subcontractors, or agents) may not discharge, demote, suspend, threaten, harass, or discriminate against an employee who takes lawful action to: (1) report; (2) assist in an investigation of; or (3) file, testify or participate in proceedings concerning certain illegal conduct by the employer. Conduct covered by the Act includes activities that the employee “reasonably believes” to be mail, wire, bank or securities fraud or a violation of a Securities and Exchange Commission rule or regulation or federal law related to shareholder fraud. The Act’s protections apply to employees who supply information or assistance to a federal regulatory or law enforcement agency, to a member of Congress or Congressional committee, or to a company supervisor with authority over the employee or authority to investigate, discover, or terminate the reported misconduct. The Act also amends the Employee Retirement Income Security Act (“ERISA”) (see above) to impose heavy criminal penalties on plan administrators who violate ERISA’s extensive reporting and disclosure requirements.
Enforcement: The antiretaliation provisions of the Act are enforced by the Department of Labor’s Occupational Health and Safety Administration (“OSHA”).
Remedies: Employees who face retaliation for protected activities under the Act may file a complaint with the OSHA Area director responsible for enforcement activities where the employee lives or worked, or with any OSHA officer or employee, within 90 days after an alleged violation of the Act occurs. If the Department of Labor takes no action within 180 days, the employee may sue in federal court for reinstatement, back pay with interest, and other compensatory damages including litigation costs, expert witness fees, and reasonable attorney fees.
Related Regulations:
OSHA: Procedures for Handling Discrimination Complaints under Title VII of the Sarbanes Oxley Act, 29 C.F.R. Part 1980.
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