#USA #Washington #Hinckley Allen #Sarbanes-Oxley #Carlos Domenech

Historic Victory for Whistleblower

In a significant legal triumph, Hinckley Allen has secured a staggering $34.5 million recovery for their client, Carlos Domenech Zornoza, after an extensive nine-year struggle related to whistleblower retaliation under the Sarbanes-Oxley Act (SOX). This case stands out as the largest documented recovery in history for a whistleblower under this law, which was established following the infamous Enron scandal in 2005.

Background of the Case

Carlos Domenech, who held prominent positions as the former President and CEO of Terraform Global, Inc. and Terraform Power, Inc., as well as the Executive Vice President of SunEdison, Inc., began facing retaliation after he reported ethical concerns regarding the financial representations made by SunEdison’s leadership. His whistleblower efforts commenced in November 2015 when he informed the Board of Directors about misleading financial statements that misrepresented the company's liquidity and financial condition. Tragically, just weeks after raising these serious concerns, Domenech was terminated from his post.

Following his wrongful dismissal, Domenech filed a whistleblower retaliation lawsuit in May 2016 under SOX, which aims to protect employees who report corporate wrongdoing. This action marked the beginning of a lengthy and arduous legal battle.

The Legal Journey

The complexities of this case involved multiple legal maneuvers over several years. Initially, Domenech filed his complaint with the Department of Labor, but after facing delays, he opted to escalate his case to federal court. In 2018, he submitted a SOX complaint against Terraform Global and several key figures within the organization.

As the legal proceedings unfolded in the U.S. District Court for the District of Maryland, the Court ultimately ruled in favor of Domenech after discovering that he had indeed been wrongfully terminated in retaliation for his whistleblowing activities. In January 2025, following the Court's finding of liability, Terraform Global decided to settle for $34.5 million just before the case was set to proceed to the damages phase of the trial. This decision exemplifies significant recognition of prisoner rights for corporate whistleblowers.

Implications of the Ruling

The outcome has greater implications for corporate governance and whistleblower protections. James L. Tuxbury, a Partner at Hinckley Allen, expressed pride in representing Domenech, emphasizing the importance of employee protection for those who come forward to disclose wrongdoing. The ruling serves as a powerful reminder to corporate boards about the critical nature of safeguarding whistleblowers, promoting ethical practices, and demonstrating that retaliation will not be tolerated.

Christopher V. Fenlon, another Partner at the firm, highlighted that the ruling reinforces the essential role of whistleblower protections, sending a clear message that those exposing fraudulent acts will be upheld, not punished.

Looking Ahead

Reflecting on the entire ordeal, Carlos Domenech stated that the integrity fundamental to corporate culture is pivotal for trust and lasting success. He extended his gratitude towards Hinckley Allen, whose relentless advocacy played a crucial role throughout the litigation, leading to this landmark settlement.

In conclusion, this case not only marks a victory for Carlos Domenech but also reshapes the landscape for whistleblower protections under the Sarbanes-Oxley Act. Corporate entities are reminded of their accountability and the empowerment of individuals who raise concerns about unethical practices, illustrating the crucial connection between integrity and corporate success.