The U.S. Supreme Court expanded the reach of a federal law enacted in response to the 2001 Enron Corp. collapse, saying it protects people who work for a public company’s contractors, including law firms and auditors.
The justices, voting 6-3, allowed whistle-blower claims by two former employees of a privately held company that provides investment advice and management services to the Fidelity mutual funds.
The suing employees, Jackie Hosang Lawson and Jonathan M. Zang, worked for units of privately held FMR LLC. The units provide investment advice and management services to publicly traded Fidelity mutual funds.
The workers say they lost their jobs after reporting fraud. Lawson complained that expenses were being inflated and, ultimately, passed on to fund shareholders. Zang contended that a Fidelity statement filed with the Securities and Exchange Commission (SEC) misrepresented how portfolio managers were compensated.