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Privately-Held Company Found Liable for SOX Violation

By Clea

Sarbanes-Oxley?s ever expanding sphere of influence grew further in April when the Department of Labor ruled that private companies that perform work for public companies will now held accountable under SOX.

The ruling came after a complaint was filed with OSHA by an in-house attorney who worked for a publicly traded company (the attorney?s name and company seem to have been withheld). After the attorney learned that her company had sent misleading information to the SEC, she reported the information to the Board of Directors.

Her company hired a privately held, outside consulting firm to help reorganize. This is important because, after the attorney followed up on her report to the Board, she was fired by the outside company.

The attorney then sued both her company and the outside, privately-held firm that fired her, alleging that they both violated the whistle-blower provisions of Sarbanes-Oxley. An administrative law judge, as well as the DOL?s Administrative Review Board, ruled in her favor.

Full post as published by Ethisphere Blog - Good. Smart. Business. Profit. on May 14, 2009 (boomark / email).