February 04, 2016 Top Story

Circuit Split on Dodd-Frank's Whistleblower Protections

Second Circuit breaks with Fifth Circuit and concludes reporting to SEC not necessary

Sara E. Costello

The Dodd-Frank Wall Street Reform and Consumer Protection Act protects whistleblowers even if they do not give information to the Securities Exchange Commission, concludes a federal circuit court, contradicting another circuit court. In Berman v. Neo@Ogilvy LLC, the U.S. Court of Appeals for the Second Circuit defers to the SEC’s interpretation of who qualifies for Dodd-Frank’s anti-retaliation protections. Section leaders see the potential for Supreme Court resolution of the split with the Fifth Circuit in Asadi v. G.E. Energy (USA), L.L.C.

Whistleblower Confusion under Dodd-Frank 

Dodd-Frank protects whistleblowers from retaliatory discharge. Two provisions of the statute, however, generate confusion over who qualifies for protection. Subsection 21F(a)(6) of the statute defines a “whistleblower” as an individual who provides “information relating to a violation of the securities laws to the Commission.”  Subsequently, subsection 21F(h)(1)(A)(iii) states that employers are prohibited from retaliating against whistleblowers that, among other things, make disclosures protected under the Sarbanes-Oxley Act (SOX). Thus, this portion of the statute does not expressly require reporting to the SEC.

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