(Reuters) — The U.S. Supreme Court on Monday agreed to examine how difficult it should be for financial whistleblowers to win retaliation suits against their employers as the justices took up a long-running case involving Switzerland’s UBS Group AG.
The judges will hear an appeal by Trevor Murray, a former UBS bond strategist, of a lower court’s decision to throw out his 2021 lawsuit that accused the firm of illegally firing him for refusing to publish misleading research reports and complaining of being pressured to do it. .
The appeal involves a technical but important issue — whether whistleblowers who sue their employers for retaliation under the federal Sarbanes-Oxley Act must prove that companies acted with “retaliatory intent.”;
The New York-based 2nd US Circuit Court of Appeals ruled last year that Mr. Murray was required to meet this bar and failed, creating a split with four other federal appeals courts. Those courts have said that defendants in Sarbanes-Oxley cases can raise lack of intent as a defense, but that plaintiffs do not have to prove that employers acted with intent.
A Supreme Court ruling in favor of UBS could significantly limit lawsuits by financial whistleblowers because it is often difficult for plaintiffs to prove a defendant’s motive.
Murray, who worked in UBS’s mortgage securitization unit, accused UBS officials of pressuring him to release skewed and bullish research on commercial mortgage-backed securities to support the Swiss bank’s trading and insurance operations. He has said he was fired in 2012 about two months after complaining to supervisors and despite receiving excellent performance reviews.
UBS has denied wrongdoing and said Murray’s dismissal was part of a cost-cutting drive that eliminated thousands of jobs.
The Sarbanes-Oxley Act was passed in 2002 and created improved accounting standards for publicly traded US companies after a series of accounting scandals, along with new legal protections for employees who report illegal conduct.
The Supreme Court will hear the case during the next term, which begins in October.