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Coupang Settles Iran Whistleblower Suit with Former Compliance Attorney

Published
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11

Why it matters

Coupang Inc. and Philip Smith, a former in-house compliance attorney, have agreed to dismiss Smith's whistleblower retaliation lawsuit through joint filing in the United States District Court for the Western District of Washington. The settlement resolves Smith's claims that he was wrongfully terminated after raising concerns about the company's alleged illegal business dealings with Iranian entities and inadequate internal accounting controls.

Smith filed suit in 2023 after reporting the transactions to the SEC and escalating his concerns to supervisors. Although Smith worked in South Korea for a Coupang subsidiary, the court determined in March 2025 that the employment relationship's center was in the United States, allowing the case to proceed under Sarbanes-Oxley whistleblower protections and state law claims. The specific settlement terms remain undisclosed.

The case established precedent for SOX protections extending to employees working abroad for foreign subsidiaries of U.S. companies—a distinction that will matter for multinational corporations managing compliance across borders. For Coupang specifically, the settlement concludes one of several legal headwinds facing the Seattle-headquartered e-commerce company, which is also defending securities class actions stemming from a 2025 data breach affecting 33.7 million customers.

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