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Proskauer Whistleblower Defense

OSHA Launches “Expedited Case Processing Pilot” For Whistleblower Claims

Posted in Uncategorized

oshaOn August 1, 2016, the U.S. Department of Labor (DOL) launched a new pilot program, titled “Expedited Case Processing Pilot,” in its Western region.  Here is the DOL’s press release describing the program.  The program enables a complainant filing claims under whistleblower statutes to ask OSHA to cease its investigation and issue findings in an expedited fashion.  Continue Reading

Wisconsin District Court Follows 5th Circuit: Internal Tipsters Are Not Considered “Whistleblowers” Under Dodd-Frank

Posted in Dodd Frank

ED WiscoOn August 12, 2016, the U.S. District Court for the Eastern District of Wisconsin in Lamb v. Rockwell Automation Inc., No. 15-CV-1415-JPS (E.D. Wis. Aug. 12, 2016) held that the Dodd-Frank whistleblower protection provision (Section 922) only protects individuals who provide information to the SEC.  In so holding, the court adopted the Fifth Circuit’s holding in Asadi v. F.E. Energy (USA), L.L.C., 720 F.3d 620 (5th Cir. 2013) and rejected the SEC’s regulatory guidance and the Second Circuit’s holding in Berman v. Neo@Ogilvy LLC, 801 F.3d 145 (2d Cir. 2015).   Continue Reading

SEC Penalizes Company For Severance Language Purportedly Impeding Complaints

Posted in Dodd Frank, SEC

sec owbOn August 10, 2016, the SEC announced that BlueLinx Holdings Inc. (Company) is settling charges that it violated Rule 21F-17 by requiring outgoing employees to waive whistleblower bounty awards in connection with severance agreements and by using an overly restrictive confidentiality clause.  The Company agreed to pay a penalty of $265,000 and revise its agreements.  The Order can be accessed here. Continue Reading

SEC Affirms Denial of Bounties to Three Purported Whistleblowers

Posted in SEC

SEC LogoOn July 19, 2016, the SEC issued an order upholding the SEC Claims Review Staff’s (“CRS”) Preliminary Determination denying three claims for whistleblower awards.  The SEC’s order explains how the claimants’ bounty requests were properly denied for failing to meet the SEC’s eligibility requirements.  As we have previously discussed here, all but a few whistleblower tips fail to lead to any award; this order serves as a reminder that a whistleblower’s information must have, in the SEC’s view, “significantly contributed to the success of [its] action.”  17 C.F.R. § 240.21F-4(c). Continue Reading

SEC Whistleblower Chief Sean McKessy to Leave, Agency Announces

Posted in SEC

secThe SEC announced today the departure of Sean X. McKessy, Chief of the SEC’s Office of the Whistleblower.  Mr. McKessy was the first to hold that role and started his post in February 2011.  Mr. McKessy is credited with developing and establishing the Dodd-Frank whistleblower bounty program from complaint intake to prosecution to the payment of substantial monetary awards to whistleblowers. Continue Reading

S.D.N.Y. Dismisses SOX and Dodd-Frank Whistleblower Claims For Lack Of Protected Activity

Posted in Dodd Frank, SOX Whistleblower Decisions

sdnyOn June 22, 2016, Judge Daniels of the Southern District of New York dismissed SOX and Dodd-Frank whistleblower claims, ruling that Plaintiff’s alleged internal complaints did not constitute protected activity, as they did not implicate securities laws, mail fraud, or wire fraud.  Diaz v. Transatlantic Reinsurance Co., No. 16-cv-1355. Continue Reading

Eighth Circuit Deals Significant Blow To SOX And Dodd-Frank Whistleblowers

Posted in Dodd Frank, SOX Whistleblower Decisions

8thOn June 6, 2016, the Eighth Circuit affirmed the Minnesota District Court’s grant of summary judgment on SOX and Dodd-Frank whistleblower retaliation claims based on the plaintiff’s failure to establish a reasonable belief that the defendant employer engaged in fraud on shareholders. Continue Reading

SEC Issues $17 Million Whistleblower Award

Posted in SEC

Yesterday, the SEC issued a stunning $17 million award to a former employee, whose “detailed tip” provided original information to SEC enforcement staff that “substantially advanced their investigation” into the whistleblower’s former employer.  The SEC specifically credited the “company insider” with allowing enforcement staff “to conserve time and resources in the investigation, and help[ing] staff to gather evidence supporting the [SEC’s] charges.”  Four other claimants who sought awards in conjunction with the same enforcement action saw their claims denied for failing to meet the standard of “voluntarily provid[ing] the Commission with original information that leads to” successful enforcement.

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No Bounty For Purported Whistleblower Tipster

Posted in Dodd Frank, SEC

SEC LogoOn May 31, 2016, the U.S. Securities and Exchange Commission (“SEC”) issued an order upholding the SEC Claims Review Staff’s (“CRS”) Preliminary Determination denying a claim for a whistleblower award in connection with the enforcement action SEC v. CVS Caremark Corp.  Notice of Covered Action 2014-48 (“Covered Action”).  This order provides insight into a whistleblower tip that essentially goes nowhere, which is what happens to the overwhelmingly vast majority of them.  And this insight is valuable because most attention has been focused on those very few instances where the SEC has in fact awarded a bounty.  During the Fiscal Year 2015, the SEC received 3,923 tips, issued orders and determinations on roughly150 whistleblower claims, but only paid out awards to 8 Claimants during that time (or in just over .2 percent of the tips filed).  See SEC 2015 Annual Report to Congress on the Dodd-Frank Whistleblower Program. (See our posts on the 2015, 2014, 2013 and 2012 Annual Reports). Continue Reading