US Labor Department Wants Whistleblower To Show that Sarbanes-Oxley Act Covers UBS Financial Services

Whistleblower and former UBS Financial Services Senior Vice President Timothy Flynn has been asked to show that the UBS AG subsidiary falls under the federal whistleblower statute. According to Flynn’s attorney, The US Department of Labor made the request. The department is in charge of enforcing the Sarbanes-Oxley Act’s whistleblower protection for employees who report alleged wrongdoings that occur publicly traded companies.

While UBS AG is publicly traded, the labor department wants Flynn to show that subsidiary UBS Financial Services is integrated into the Zurich-based company and is therefore covered by the act. Flynn’s lawyer, however, says that when a whistleblower is employed by the subsidiary of a publicly traded company, the subsidiary, along with the entire company, is subject to the same securities laws.

Flynn filed his whistleblower complaint against UBS Financial Services last June. He alleges that after he told Massachusetts regulators that the company did not tell its advisors that there were liquidity issues brewing within the auction-rate securities market, UBS financial services retaliated by locking him out of his office, preventing staff members from interacting with him, and suspending him from his job.

Last May, UBS Financial Services said it would return $37 million to the Massachusetts Turnpike Authority and the state municipalities that invested in ARS. The repayments are part of the settlement the company reached with the Massachusetts Attorney General. The agreement was reached after Flynn, the broker for many of these clients, testified.

Related Web Resources:

Labor Asks Whistleblower to Show Why Act Covers UBS Subsidiary, Wall Street Journal, August 31, 2008
Ex-UBS broker sues, alleging firm retaliated,, July 3, 2008
The Sarbanes-Oxley Act

Same broker tied investors to UBS, May 16, 2008
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