Dodd-Frank whistleblowers protected only if they report to SEC
On February 21, 2018, the U.S. Supreme Court ruled that employees who report financial wrongdoing under the Dodd-Frank Wall Street Reform and Consumer Protection Act are protected from retaliation only if they make their reports to the Securities and Exchange Commission (SEC). The Supreme Court overruled a U.S. Ninth Circuit Court of Appeals decision on which we previously reported, which had said that employees’ internal complaints to management of securities law violations under Dodd-Frank were protected. The Supreme Court’s decision means that employers have a clear line for determining whether a worker’s complaint of a securities violation is protected by law (Digital Realty Trust, Inc. v. Somers, US, Feb. 2018).
Tips for Employers: Whistleblowers who provide original information that allows the government to successfully prosecute a company under Dodd-Frank have the potential to receive a cash award of 10 to 30 percent of any financial penalties the government collects. If you receive an internal complaint, use the opportunity to investigate promptly, so you can attempt to take any necessary corrective action to head off an official complaint to the SEC.
This website presents general information in nontechnical language. This information is not legal advice. Before applying this information to a specific management decision, consult Vigilant or legal counsel.