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Former General Counsel Sues Bio-Rad Alleging Whistleblower Retaliation

NEW YORK (GenomeWeb) – Bio-Rad Laboratories' former general counsel and executive vice president Sanford Wadler has filed a lawsuit against the firm alleging that he was fired due to his efforts to uncover wrongdoing at the company.

In a lawsuit filed on Wednesday with the US District Court for the Northern District of California, Wadler, a 20-year veteran of the firm, says Bio-Rad fired him when he refused to turn a blind eye to evidence of Foreign Corrupt Practices Act violations in China.

Specifically, the whistleblower suit names Bio-Rad CEO Norman Schwartz, board members Louis Drapeau, Albert Hillman, and Deborah Neff, and Alice Schwartz, a board member who is also the CEO's mother.

Bio-Rad had previously self-reported its discovery that international subsidiaries made improper payments to foreign officials in Russia, Vietnam, and Thailand in order to win business. For ignoring red flags of FCPA breaches, the company settled with the Department of Justice and the Securities Exchange Commission for $55 million late last year.

But an outside law firm hired by Bio-Rad concluded as part of internal investigations that there was no evidence of improper payments in China, according to the suit.

"Wadler was surprised by that conclusion, given the volume of business that Bio-Rad conducted in China, the company’s apparently routine practice of committing FCPA violations in Russia, Thailand, and Vietnam, and the fact that China was a country notorious for its endemic corruption," the suit states.

Wadler began his own investigation after being unable to obtain documents connected with an internal audit of royalty calculations for products licensed from Thermo Fisher Scientific's Life Technologies and sold in China.

The suit states Wadler was concerned that a paucity of paperwork could appear to be an effort to conceal illegal actions, and that Life Tech may in turn file a lawsuit which would then open up new avenues for scrutiny in the then-ongoing DOJ and SEC investigations before the firm could self-disclose.

In his subsequent investigations, Wadler uncovered evidence of "bribery, books-and-records violations, and that language had been altered in documents in Chinese in order to circumvent Bio-Rad’s internal controls," the suit alleges. 

It also states that Wadler became concerned when Bio-Rad then re-engaged the original law firm to investigate his findings further, as any discovery of wrongdoing would also reveal that the initial investigation had been deficient.

Wadler said in his complaint that his suspicions further increased in a meeting between the company and its outside auditors in early 2013. There, CFO Christine Tsingos, who is not named in the suit, allegedly asserted that she wanted to "send people to China to attempt to unearth the missing documents for the Life [Technologies] audit," but CEO Norman Schwartz prevented her from doing so.

The suit says that Wadler reported "up the ladder" the potential violations he noted, but shortly before Bio-Rad was scheduled to present to the SEC and DOJ, the company fired Wadler, "precisely because he refused to be complicit in its wrongdoing," the complaint says.  

Wadler claims that, among other things, Bio-Rad violated sections of the Sarbanes-Oxley and Dodd-Frank US federal laws preventing retaliation against corporate whistleblowers, as well as the California labor code.

Wadler was given a positive performance review and a raise six months prior to being fired. His suit states that he was harmed through loss of wages and benefits and that he also "suffered humiliation, mental anguish, and emotional and physical distress."

Wadler is seeking twice the amount of back pay owed to him by Bio-Rad, along with the maximum interest allowed by law. He also asks the court to reward him damages, including for mental pain and anguish; litigation expenses; and other relief.

Bio-Rad did not respond to a request for comment in time for publication.