Whistleblower Argues for Reinstatement in Appeal

RICHMOND, Va. -- The first person to win protection under a federal law that shields whistleblowers deserves his job back at the small-town bank he said overstated its profits, his attorneys argued Wednesday, according to The Associated Press.

David Welch, whose case was being heard by the 4th U.S. Circuit Court of Appeals, was fired as chief financial officer of Cardinal Bankshares Corp. in October 2002 after he reported what he said were misclassifications in its financial reports, the AP reported.

A federal administrative law judge ruled in 2004 that Welch should be reinstated under the Sarbanes-Oxley Act, a law enacted in response to corporate scandals at Enron Corp., WorldCom Inc. and other companies. But Cardinal has refused to give Welch his job back, the AP reported.

Welch felt obligated to report the description of profits in one of Cardinal's financial statements that he said violated federal securities law and generally accepted accounting principles, attorney Bruce Shine said in his appeal of a June ruling by the Department of Labor's Administrative Review Board. The review board ruled that Welch's complaints and objections to the bank's financial statements were not covered by the Sarbanes-Oxley Act, the AP reported.

-- NYSSCPA.org News Staff

Posted on 5/15/08