Cardinal Bankshares Prevails in Landmark Sarbanes-Oxley Case
The Supreme Court of the United States, on April 20, 2009, declined to review Welch v. Chao, which has been one of the most widely followed Sarbanes-Oxley (SOX) cases to date. Welch had been the CFO of a community bank resulting in the case being closely watched in both the banking and accounting communities. Welch had "forcefully communicated" his concerns about Cardinal's accounting practices in 2002 and filed a timely complaint. The ALJ ruled in his favor.
Washington partners Betty Southard Murphy and Marc A. Antonetti joined Cardinal Bankshares Corp.'s regular counsel in appealing this decision to the Department of Labor's Administrative Review Board. The ARB reversed the ALJ's decision and the former employee petitioned the United States Court of Appeals for the Fourth Circuit for review. He was unsuccessful and then appealed to the Supreme Court. The Fourth Circuit had held that the Department of Labor's Administrative Review Board correctly found the Virginia Bank's former CFO failed to show he engaged in protected activity under SOX because he failed to show how the company's conduct violated any of the federal laws referred to in the statute. This is a landmark decision.
Following the Court's denial of certiorari, Murphy, who was counsel of record, said that Cardinal "had the tenacity to fight for this victory for almost 7 years because it had not done anything wrong. Everything Cardinal did was correct."
To read more about the case as summarized in the BNA Daily Labor Report®, click here.