A recent California district court addressed the question of whether, for insurance coverage purposes, a SOX whistleblower claim is a "securities claim," and answered that question in the affirmative. Skye Bioscience v. PartnerRe Ireland Insurance DAC, No. 23-cv-01218.
Section 1514A of SOX provides a cause of action for employees who face alleged retaliation because of certain lawful whistleblowing activity. 18 U.S.C. ' 1514A(a). Section 1514A differs from other provisions in SOX in that the elements of a SOX whistleblower retaliation claim focus on the employment relationship. Section 1514A provides for traditional employment remedies such as reinstatement and backpay, and it is administered by the Occupational Safety and Health Administration (OSHA) instead of the Securities and Exchange Commission (SEC).
These aspects of Section 1514A have led insurers to conclude that insurance coverage for securities claims does not extend to SOX whistleblower claims. For example, some insurers have assumed that liability arising from...
