In a case involving two former employees of Fidelity Investments, a federal judge has ruled that the Sarbanes-Oxley law protecting whistle-blowers at publicly traded companies also extends to mutual fund firms.

In the past, mutual funds have argued that they should be exempt because they have no workers apart from their boards of directors.

U.S. District Judge Douglas Woodlock in Boston rejected Fidelity's request to dismiss the case, saying that doing so "would result in an excessively forced and formulistic reading" of the law.

This marks the first time a federal court has applied Sarbanes-Oxley to fund companies, according to a lawyer for one of the employees.

According to the case, Jackie Hosang Lawson worked at Fidelity from 1993 to 2007. She said she alerted the company to its improper retention of $10 million in fees, only to be passed over for promotions and threatened with punishment.

Another plaintiff, Jonathan Zang, said he was fired in retaliation for complaining that a new pay plan for portfolio managers misrepresented how pay was calculated.

Fidelity said the claims are without merit and it will defend itself against them.

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