After an administrative law judge decided Welch was entitled to be reinstated as the chief financial officer for Cardinal Bancshares, the Department of Labor's Administrative Review Board ruled that the activity for which Welch had been fired was not protected under the whistleblower provisions of the Sarbanes-Oxley Act. The latter is the decision under review by the federal appeals court.
The AP reports that Welch is once again arguing he deserves reinstatement:
Welch felt obligated to report the description of profits in one of Cardinal's financial statements that he said violated federal securities law and generally accepted accounting principles, attorney Bruce Shine said in his appeal of a June ruling by the Department of Labor's Administrative Review Board.... Still, Shine told a three-judge appeals court panel Wednesday, "as long as this third quarter report was hanging out there, it was misleading investors."
The Department of Labor, on the other hand, maintains that Welch is not entitled to whistleblower protection under Sarbanes-Oxley because he did not connect the alleged wrongful conduct of Cardinal Bancshares employees to specific securities law violations.