Sarbox Whistleblower Case Suffers Setback

Lora Bentley

David Welch blew the whistle on Cardinal Bankshares in 2002, after which he was fired from his postion as CFO. Now, six years later, his quest for protection under the whistleblower provisions of the Sarbanes-Oxley Act has come to an abrupt halt. reported Wednesday that a three-judge panel of the U.S. Court of Appeals for the Fourth Circuit sided against Welch, ruling he is not entitled to reinstatement.


If you've read Sarbox Survival Guide for awhile, you're familiar with Welch's story. (See here for the first post and here for the most recent one.)


When he first sought reinstatement, the Department of Labor administrative law judge determined Welch should get his job back, but the DOL administrative review board decided that the activity for which Welch had originally blown the whistle was not "protected activity" under Sarbanes-Oxley. Having exhausted his options at the agency level, Welch took his case to federal court, asking the U.S. District Court for the Western District of Virginia at Roanoke to enforce the Department of Labor's original recommendation. The court refused to do so, and Welch pressed his case to the appeals court, which also denied his request.


Unless Welch decides to seek relief from the U.S. Supreme Court, this is finally the end of a very long road for the first Sarbanes-Oxley whistleblower.

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