Fifth Circuit Court Affirms Halliburton Retaliated Against Whistleblower

The Fifth Circuit Court of Appeals affirmed a U.S. Department of Labor Administrative Review Board ruling that found the firm retaliated against whistleblower Anthony Menendez. Menendez questioned some of Halliburton’s accounting practices. Later, he submitted a confidential complaint with the Securities and Exchange Commission

Menendez filed a complaint under Section 806 of the Corporate and Criminal Fraud Accountability Act of 2002, Title VIII of the Sarbanes - Oxley Act (SOX) on May 8, 2006. The Department of Labor Administrative Law Judge dismissed Menendez’s complaint after finding Halliburton did not retaliate against Menendez after he engaged in SOX-protected activity.

The Department of Labor Administrative Review Board remanded the case on appeal after finding the Administrative Law Judge made a error concluding that Halliburton’s breach of Menendez’s confidentiality with regard to his complaint filed with Halliburton’s audit committee was not adverse action.

Bert Cornelison, Halliburton's general counsel, sent an e-mail that identifying Menendez as the whistleblower behind the SEC's investigation. Coworkers began to avoid Menendez and treat him differently. The SEC closed its investigation without taking action

The Department of Labor determined Halliburton’s conduct constituted illegal retaliation under the 2002 Sarbanes-Oxley Act, which prohibits retaliation against staffers that report certain kinds of suspected wrongdoing.

Rolling Stone Magazine Interview with JP Morgan Chase Whistleblower

by Sven Magnussen

Matt Taibbi, Rolling Stone Magazine, published a story on a JP Morgan Chase whistleblower, Alayne Fleischmann. Fleischmann is a lawyer who worked in JP Morgan Chase's mortgage securities department. Fleishmann alleges JP Morgan Chase executives were warned about securities fraud with respect to the packaging of mortgage backed securities. Worthless securities were packaged with fraudulently obtained mortgages and sold to an unsuspecting public with the full knowledge and approval of senior executives with JP Morgan Chase.

U.S. Attorney General Eric H. Holder, Jr. settled the civil matter for $9 billion with JP Morgan Chase and has refused to file criminal charges.

SEC Announces $30 Million Whistleblower Award

by Sven Magnussen

The Securities and Exchange Commission ("SEC") announced on September 22, 2014 an award of $30 million to a whistleblower who provided information that led to a successful SEC enforcement action.

The SEC stated:

The SEC’s whistleblower program rewards high-quality, original information that results in an SEC enforcement action with sanctions exceeding $1 million. Whistleblower awards can range from 10 percent to 30 percent of the money collected in a case. The money paid to whistleblowers comes from an investor protection fund established by Congress at no cost to taxpayers or harmed investors. The fund is financed through monetary sanctions paid by securities law violators to the SEC. Money is not taken or withheld from harmed investors to pay whistleblower awards.

The order resulting from an SEC hearing on the matter was as follows: