5th Circuit's View on Extraterritorial Application of SOX? Not Yet
Posted
10:27 AM
by Michael Fox
One of the many issues still to be decided
for whistle-blowing claims under Sarbanes Oxley is how far does the law extend,
if at all, for conduct outside the United States.
A Colombian national who had alleged his
employer, an affiliate of a U.S. company, was violating Colombian tax law hoped
to find the answer to that question.
OSHA had rejected his complaint, finding that because the adverse
employment actions, the denial of a pay raise and his termination, had occurred
outside the U.S. it had no jurisdiction.
Following his appeal, the Administrative Law Judge agreed, finding §806
of SOX has no extra-territorial application. The Administrative Review Board
agreed, primarily because there was no connection between the alleged violation
of Colombian law and U.S. securities or financial disclosure law.
Undaunted, he turned to the
5th Circuit Court of Appeals, but fared no better. Agreeing his
complaint failed because it failed to allege a violation of “one of the six enumerated provisions of U.S.
law.”
The question of extraterritorial application? A decision for a
later day:
Because we affirm on this
narrower ground, we need not reach the argument, advanced by the government and
Core Labs, that § 806 does not apply extraterritoriality.
