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Oct 10

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$1.9 Million to Whistleblower CFO

The U.S. Department of Labor’s Occupational Safety and Health Administration (“OSHA”) ordered Clean Diesel Technologies Inc.(“CDTI”) to pay $1.9 million to its former chief financial officer in association with a violation of the whistleblower provisions of the Sarbanes-Oxley Act.

OSHA determined that CDTI wrongfully terminated the former CFO in April 2010 after he warned the board of directors in the prior month regarding ethical and financial concerns regarding a proposed merger.  The CFO had informed the board of his belief there was a conflict of interest involving the chair of CDTI’s board of directors and that

  • the proposed merger was detrimental to the company
  • critical financial information had been withheld from board members
  • the conflict of interest violated internal company controls mandated by the Securities and Exchange Commission as well as the company’s own corporate code of ethics

The award included more than $486,000 in lost wages, bonuses, stock options and severance pay and over $1.4 million in compensatory damages for pain and suffering, damage to career and professional reputation and lost 401(k) employer matches and expenses.

About the author

Renee Howdeshell

Renee Howdeshell is a founding member of Fulcrum Inquiry, an accounting, finance and economic consulting firm that performs damage analyses for commercial litigation, forensic accountings, royalty & distribution audits, financial investigations, and business valuations. Ms. Howdeshell holds a degree in Finance and Marketing from the University of Virginia's McIntire School of Commerce and is a Certified Public Accountant (CPA) and a Certified Fraud Examiner (CFE). She has testified as an expert witness in federal court, CA state court and arbitration regarding the results of her work. She can be reached at (213) 787-4112 and her resume is available at www.fulcrum.com.

Permanent link to this article: http://betweenthenumbers.net/2013/10/1-9-million-to-whistleblower-cfo/

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