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Whistle-Blower Takes Legal Action After Losing Job
Whistleblowers who have been fired for reporting corporate fraud are protected under Colorado law as well as federal law.
December 30, 2011 /Law and Legal PR News/ -- Whistle-Blower Takes Legal Action After Losing Job
Article provided by Elkus & Sisson, P.C. Visit us at www.denveremploymentlawattorney.com/
A major financial institution hires a fraud analyst to work on an internal loan fraud detection project. The employee finds indications of loan officer fraud in mortgage loan applications, mainly inflated borrower income. She reports the fabricated information as fraud.
Job well done, most would say, especially those who consider the increase of mortgage fraud as one of the origins of the financial and economic crisis of the late 2000s. As shown by a federal lawsuit filed in Colorado, however, managers and executives at the bank thought this was anything but good detective work.
Punished For Simply Doing a Good Job
According to an iWatch News investigative report, the employee alleged in her lawsuit that she suffered months of getting berated and harassed for uncovering fraud in home loan applications. The report states that while the employee was on disability leave to get treatment for the resulting distress and depression, the bank replaced her.
The employee also claimed that executives turned a blind eye to specific instances of loan officers' fraud, according to iWatch. They eliminated the analyst's fraud report, told her to stop calling an ethics hotline and scolded her for trying to remove fraudulent loans from the underwriting system.
State Wrongful Termination Law
The parties reached a confidential settlement, so it is uncertain whether the financial institution admitted any fault in its treatment of the employee or the way it handled her reports of mortgage fraud. What is clear, though, is that terminated employees like her have options under Colorado law such as wrongful termination claims based on retaliation for whistle-blowing or refusing to perform illegal activities.
Federal Law Seeks to Protect Whistleblowers
Federal law also provides whistle-blower protection to employees, notably the Sarbanes-Oxley Act of 2002. Under this law, employees who report securities fraud can bring whistleblower retaliation claims in front of a federal Department of Labor agency and appeal if they are denied; corporate whistle-blowers can also collect cash awards for reporting securities fraud. In addition, the Dodd-Frank Wall Street reform law, passed in 2010, provides employees additional protection from retaliation.
Employers are prohibited from retaliating against employees who report fraud or other illegal activity. Employees who have been terminated or demoted for whistle-blowing should contact a knowledgeable wrongful termination attorney who can review the facts of your case and advise whether you have a valid legal claim.
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