Can the CEO of a publicly held company be a whistleblower?
Well, that’s what Louis D. Paolino Jr. seems to be claiming in a letter filed with the Securities and Exchange Commission on Friday.
Paolino was terminated as CEO of Mace Security International Inc., of Fort Lauderdale, Fla., May 20, for what the board described as willful misconduct.

Lots of CEOs not only keep their jobs but get raises when their companies perform poorly. Even when a CEO gets ousted, he often leaves with a generous severance package.

Then there’s the situation between Paolino and Mace, the maker of self-defense sprays that used to be based in Mount Laurel.

Mace, which has not been profitable since 2001, dumped Paolino after the board said he was not following its instructions. The company will not pay him any severance.

Not so fast, according to a “statement of disagreement” written by Paolino and filed with the Securities and Exchange Commission.
The ex-CEO says he’ll seek arbitration for more than $4 million in damages for the breach of his employment contract and more than $6 million for defamation of character.
But more intriguing is Paolino’s statement that he’ll file a claim with the federal Labor Department as a whistleblower. Why would he do that? Paolino claims the board was requesting him to take actions “in violation of my obligations under Sarbanes-Oxley.”
That’s the law, passed after the collapse of WorldCom, that tightened public companies’ oversight of their accounting practices.
Paolino is going to have a tough time convincing regulators that he’s the underdog. Far from being a powerless worker bee in a sprawling enterprise, Paolino was in charge of Mace for nearly nine years. Plus, he certified Mace’s latest 10-Q, under a provision of the Sarbanes-Oxley law. Why’d he sign if he had some concerns about disclosure?
For its part, Mace said it disagrees with the statements made by Paolino in his letter and that it “intends to vigorously defend any litigation he initiates.”