Whistleblower Lawsuit Re SEC Regulations

Originally published by Thomas J. Crane.

In 2002, in reaction to the Enron scandal, Congress passed the Sarbanes-Oxley Act. The Act protects whistleblowers who report violations of securities regulations regarding accurate reporting. See National Whistleblower Center post regarding the act here. There was a whistleblower at Enron who did try to report the violations of securities regulations. And, here in San Antonio, we see a Sarbanes Oxley whistleblower who was fired by Spectrum. Hether McCullar has filed a federal lawsuit saying Spectrum fired her after she tried to tell management they were mis-classifying renewed accounts as completely new accounts. It looked better to have new accounts than to record simple renewals. Ms. McCullar tried to tell her supervisors this mis-classification was occurring.

The result of the mis-classification was to overstate the number of renewals. The number of renewed accounts would then appear on the mandatory SEC filings.

In response, alleges the employee, the company took away from Ms. McCullar a valuable account, the HEB account. The account was given to another sales executive in Austin, despite the fact that Ms. McCullar was here in San Antonio. Months later, Ms. McCullar was given a final warning, even though she had never received any prior written warnings. The final warning appeared to link her report of mis-classification to some sort of policy violation.

Spectrum later fired Ms. McCullar with no reason. See San Antonio Express News report here. Yes, at least based on these allegations, that does indeed sound like a whistleblower claim.

 

 

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