Accountant Loses Bid to Sue Tyco for Retaliation

     PHILADELPHIA (CN) – A federal judge dismissed a suit by a former Tyco accounting manager who said he was axed for refusing to write off a $350,000 Bahamian bash at the Atlantis Resort, one of several “extravagant parties …[that] were almost identical to parties for which Tyco’s former CEO was criminally charged and convicted.”



     Former Tyco CEO Dennis Kozlowski is serving up to 25 years in prison after being convicted in June 2009 of looting hundreds of millions of dollars from the manufacturing giant.
     Kozlowski cemented his place as one of the most profligately crooked CEOs ever after he billed Tyco investors for all sorts of personal extravagances, including an epic $2 million, Roman-themed Sardinian shindig to celebrate his second wife’s birthday.
     Investors footed about half the bill for that affair, which was disguised as a shareholder meeting and is now widely known as the Tyco Roman Orgy.
     The party featured such indulgences as an ice sculpture modeled after Michelangelo’s David urinating top-shelf vodka.
     Against this backdrop in 2008, Jeffrey Wiest said he “refused to process a payment [for] and sent a note to his management questioning the legitimacy of a $350,000 event being held at the Atlantis Resort in the Bahamas.”
     “Wiest, as was virtually everyone else at Tyco and in the world, was cognizant of a similar party under Dennis Kozlowski’s management,” according to the manager’s July 2010 suit, first reported by Courthouse News. “He did not want to be any part of a repeat occurrence.”
     Particularly concerning to Wiest were requests to reimburse $3,000 for “Mermaid Greeters” and “Costumed Pirates/Wenches;” $2,350 for a tattoo artist plus “Limbo” and “fire” dancers; and $2,500 for “chair covers and sashes,” according to the suit.
     Wiest said he was fired in retaliation for blocking reimbursement for the party, which, he discovered, included “only one 1.5-hour business meeting during the entire five-day event.”
     Claiming that Sarbanes-Oxley protected that refusal to reimburse, Wiest also included counts for intentional infliction of emotional distress, wrongful firing and a loss of consortium claim brought by his wife, Laura.
     U.S. District Judge Gene Pratter found otherwise Thursday, dismissing the entire complaint, but granting Wiest the opportunity to amend.
     Wiest failed to sufficiently show that he engaged in protected activity as defined under Sarbanes-Oxley, Pratter found in a 20-page opinion.
     The emails Wiest attached as exhibits to his complaint failed to sufficiently show that he clearly told supervisors that “shareholder fraud had either taken place or was in progress,” Pratter wrote.
     In one email, for example, Wiest merely “recommends that the tax department review the areas listed in the email,” according to the ruling.
     “Nothing in the email would allow the Court to draw a reasonable inference that Mr. Wiest’s concern about proper tax and accounting treatment was connected in any way to a concern about shareholder fraud,” Pratter wrote.
     “Mr. Wiest’s communications simply provided information and suggestions to ensure proper tax and accounting treatment of the Atlantis event expenses. As such, then, they did not rise to the level of ‘definitively and specifically’ conveying a reasonable belief that [a Sarbanes-Oxley crime] was taking place, notwithstanding Mr. Wiest’s conclusory assertion in the complaint that he had made ‘protected disclosures relating to fraudulent accounting practice, attempted shareholder fraud, and lack of compliance with United States Generally Accepted Accounting Principles.'”
     Merely refusing to process reimbursement for the Atlantis party does not constitute protected activity under Sarbanes-Oxley, Pratter ruled, noting “that a refusal to act without any explanation generally does not ‘provide information’ about a potential SOX violation.”
     “Mr. Wiest has not alleged that he explained to his supervisors that his refusal to process the Atlantis payment … related to a concern regarding potential fraud on the shareholders,” the judge found.
     “The Court concludes that Mr. Wiest has failed to make a sufficient factual showing to support a reasonable inference that either his email communications relating to the Atlantis event expenses or his refusal to process the subject payment constituted protected activity,” Pratter wrote, declining to exercise supplemental jurisdiction over Wiest’s state-law claims.
     Wiest has until Aug. 20 to file an amended complaint. 

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