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Jury Awards $1.6 Million to Whistleblower in Sarbanes-Oxley Case

A federal jury in New York recently awarded $1.6 million to a whistleblower who provided useful information in a retaliation lawsuit under the Sarbanes-Oxley Act. This award is consistent with a recent national trend of awarding whistleblowers with large sums of compensation, the idea being that larger rewards lead to more whistleblowers willing to come forward.

The whistleblower in this case, Julio Perez, was an employee at Progenics Pharmaceuticals. Part of his job was working with representatives of Progenics and Wyeth to help develop a drug called Realistor, which treats bowel dysfunction after operations and constipation caused by opioids. In May 2008, Progenics and Wyeth sent out a press release stating the second round of trials showed some positive activity, but within two months of the release, executives from Wyeth sent a memo to senior executives at Progenics saying the second phase of trials actually did not show enough clinical activity to warrant a third phase.

Perez was one of the executives who saw this memo, and sent a memo of his own to the senior vice president and general counsel at Progenics. In this memo, he alleged Progenics had been guilty of fraud against its shareholders, as the information included in public releases was not consistent with what actually happened in the clinical trial.

The next day, the general counsel asked Perez about the confidential memo he saw. Shortly after that, Progenics fired Perez, citing the fact that he declined to say how he saw the memo from Wyeth as the reason for the termination. Perez’s eventual successful lawsuit against Progenics is a reminder that employers must have reasonable, objective cause when terminating workers.

For further information and guidance when it comes to whistleblower complaints, meet with skilled Dallas Attorney Steve Kardell at Whistleblower Law for Managers.

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