Former Bio-Rad GC Sues Company Alleging Retaliation for Uncovering Bribes

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By Yin Wilczek

May 29 — The former general counsel of Bio-Rad Laboratories Inc. has sued the company alleging that it fired him for reporting bribery concerns related to China.

In a May 27 complaint filed in the U.S. District Court for the Northern District of California, Sanford Wadler says that after he learned Bio-Rad was involved in extensive Foreign Corrupt Practices Act violations in Russia, Thailand and Vietnam, he investigated—and uncovered—similar activity in China.

Wadler claims that after “repeated stonewalling” from the company's chief executive officer and chief financial officer regarding his concerns, he brought his suspicions to Bio-Rad's audit committee in February 2013. According to the complaint, he was “shocked” when the outside counsel engaged by the company said the following month that it failed to uncover wrongdoing in China during an internal investigation.

Wadler alleges that the company fired him in June 2013, shortly before it was scheduled to present its internal investigation findings to the Securities and Exchange Commission and the Justice Department, because “he refused to be complicit in its wrongdoing.”

A Bio-Rad representative did not immediately respond to a request for comment.

Non-Prosecution Agreement 

In November, Bio-Rad entered into a non-prosecution agreement to pay $55 million to the SEC and the DOJ to resolve allegations that it failed to prevent its subsidiaries from making improper payments to officials in Russia, Thailand and Vietnam, as well as falsifying records to hide the payments.

At the time the settlement was announced, SEC Enforcement Director Andrew Ceresney said it reflected credit for Bio-Rad's cooperation in the commission's investigation.

Wadler's lawsuit states claims under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Sarbanes-Oxley Act and the California Labor Code. It names the company, Bio-Rad Chief Executive Officer Norman Schwartz and several board members as defendants.

Wadler is represented by Michael John von Loewenfeldt, Kerr & Wagstaffe LLP, San Francisco. The defendants are represented by Linda Inscoe, Latham & Watkins LLP, San Francisco.

The U.S. District Court for the Northern District of California is no stranger to Dodd-Frank and SOX whistle-blower claims. It held in two recent decisions that an informant need not report initially to the SEC to qualify as a Dodd-Frank whistle-blower.

To contact the reporter on this story: Yin Wilczek in Washington at ywilczek@bna.com

To contact the editor responsible for this story: Ryan Tuck at rtuck@bna.com

The complaint is available at http://www.bloomberglaw.com/public/document/Wadler_v_BioRad_Laboratories_Inc_et_al_Docket_No_315cv02356_ND_Ca.