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Whistleblowers Take a Hit

Whistleblowers Take a Hit

by Rick Turoczy on March 16, 2006

The First Circuit U.S. Court of Appeals has ruled that the whistleblower protection provisions of Sarbanes-Oxley do not have extraterritorial impact, meaning they do not apply to foreign citizens reporting accounting irregularities at an American company’s foreign subsidiary.

A district court ruled that nothing in Sarbanes-Oxley’s wording suggests the extension of whistleblower protections afforded to U.S. workers to non-U.S. employees working overseas. The court partly based its decision on the generally held presumption that without clear congressional assent, extraterritorial applications of U.S. laws are not applied so as not to conflict with the laws of other countries.

Sarbanes-Oxley specifically contained Congressional language that required foreign accounting firms to register with the Public Company Accounting Oversight Board and extraterritorial jurisdiction for criminal offenses.

Whistleblowers Take a Hit

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