New Whistle-Blower Protection

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The Sarbanes-Oxley Act of 2002 is aimed at improving corporate governance and accountability at public companies and creates, among other things, legal protection for employees that provide information or assists in an investigation that he or she reasonably believes violates federal anti-fraud laws.  The Act also requires public companies to establish procedures so that employees can make complaints anonymously and confidentially to the audit committee of the Board of Directors. While the Act covers public companies only, implementing a procedure for resolving whistle-blower complaints is increasingly viewed as a best practice by privately-owned companies.