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CFO Whistleblower Reinstated by Court

CFO Whistleblower Reinstated by Court

by Rick Turoczy on February 24, 2005

A federal judge has reportedly ordered the reinstatement of David Welch, a former CFO of Cardinal Bankshares Corp. Welch was the first person to win whistleblower protection under the Sarbanes-Oxley Act after he raised accounting questions at the company and was fired last year.

Besides getting his job back at the small Floyd, Va.-based bank, Welch won nearly $65,000 in back pay and damages in the Feb. 15 ruling by U.S. Department of Labor Administrative Law Judge Stephen Purcell, according to the Associated Press.

For a law governing financial fraud, the Sarbox whistleblower provision, Section 806, is unusually strong in terms of protecting an employee’s job, notes Dan Westman, a partner at Shaw Pittman, a law firm. Indeed, the Sarbox mandate of immediate reinstatement for the whistleblower resembles industry-specific labor laws aimed at protecting workers in the mining and nuclear-power sectors. Westman told that regulators in those industries have relied for decades on whistleblower information to provide what he dubs “undersight”—information arising from the workforce that can prevent life-threatening negligence or wrongdoing.

CFO Whistleblower Reinstated by Court

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