Congress was trying to prevent the next Enron and not thinking about mutual funds when it created legislation protecting financial employees who alert regulators to accounting shenanigans, but that protection may extend to fund workers just the same if two lawsuits break the right way.

The Boston Globe's Ross Kerber looked into the possible impact of two recent whistleblower suits filed by ex-workers against Fidelity in the Thursday edition of the paper. A lawsuit filed by former Fidelity senior director Jackie Hosang Lawson in March and another lodged by ex-fund manager Jonathan Zang on Tuesday may resolve the argument regarding whether employees at fund firms are protected by whistleblower rules in the Sarbanes-Oxley Act of 2002, Kerber wrote.

Consumer activists including the Consumer Federation of America are pushing for the whistleblower rules in the law to also apply to mutual fund companies.

In its motion filed Wednesday on the Lawson suit, Fidelity said that the plaintiff's claims were "meritless" and added: "Unfortunately, there are employees who attempt to use Sarbanes-Oxley's protections as leverage against their employers and in an effort to shield themselves from legitimate employment actions. That is what happened here."

 

Edited by: Armie Margaret Lee


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