Clay Marsh | Murray v. UBS Securities, LLC

At the turn of the millennium, corporate scandals at Enron and other corporations like it cost shareholders billions of dollars in lost investments. In their wake, overwhelming majorities in both chambers of Congress passed the Sarbanes-Oxley Act of 2002 (SOX). The legislation imposed new standards for financial record-keeping and disclosure on publicly traded companies. SOX also provides for a private cause of action for corporate employees who believe they were retaliated against for reporting their firm’s financial wrongdoing to regulators. 18 U.S.C. § 1514A The legislation was an attempt by Congress to correct for a perceived deficiency in federal law where government employees were protected from whistleblower activity but corporate employees were not. Lawmakers reasoned that in complex securities fraud investigations, employees of such firms “are [often] the only firsthand witnesses to the fraud.” Lawson v. FMR LLC, 571 U.S. 429, 435 (quoting S. Rep. No. 107-146 at 10).