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Proskauer Whistleblower Defense

Highlights of SEC’s 2015 Annual Whistleblower Report

Posted in SEC

secOn November 16, 2015, the Securities and Exchange Commission’s Office of the Whistleblower (“OWB”) released its fifth Annual Report on the Dodd-Frank Whistleblower Program to Congress, which details information on OWB’s activities and bounty payouts for the fiscal year, as described in our posts on the 2012, 2013 and 2014 Annual Reports.

In its 2015 report, the SEC highlights that since the inception of the whistleblower program in 2011, the Commission has paid more than $54 million in awards to a total of 22 whistleblowers, with more than $37 million paid in 2015 alone.  The SEC also stressed that increased public awareness of the whistleblower program had led to a “substantial growth” in the number of whistleblower tips it received.  In addition, the Commission pointed to several important actions it took in 2015 aimed at protecting whistleblowers from unlawful retaliation or attempts to interfere with their ability to report to, and cooperate with, the SEC. Continue Reading

Kansas Court Dismisses Dodd-Frank Whistleblower Claim for Failure to Complain of Securities Violations

Posted in Dodd Frank

KanOn November 5, 2015, the District of Kansas dismissed a whistleblower retaliation claim under Dodd-Frank, ruling that the statute’s anti-retaliation provision only protects individuals who report securities violations.  Azim v. Tortoise Capital Advisors, LLC, Case No. 13-cv-2267. Continue Reading

ARB Rejects CFPA Whistleblower Claim On Protected Activity Grounds

Posted in Key ARB Decisions

DOLOn November 6, 2015, the DOL’s Administrative Review Board affirmed the dismissal of Consumer Financial Protection Act (“CFPA”) whistleblower claims of a terminated mortgage broker, concluding that the complainant did not engage in protected activity. Childs v Sente Mortgage, ARB Case No. 14-043. This is one of a growing number of claims being filed under the CFPA.
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N.D. Ill. Expands Definition of Protected Activity Under Ill. Whistleblower Act

Posted in State-Specific Whistleblower Claims

ndilOn October 29, 2015, the Northern District of Illinois concluded that an employee who called police regarding suspected shoplifting—in violation of company policy—succeeded in proving a claim under the Illinois Whistleblower Act (IWA).  Coffey v. DSW Shoe Warehouse, Inc., No. 14-cv-4365.  The court granted the Plaintiff’s motion for summary judgment and denied the Defendant’s motion for summary judgment, rejecting the Defendant’s argument that the Act protects only employees who report their employer’s bad actions only—and not the actions of third-parties. Continue Reading

Divided Sixth Circuit Dismisses Compliance Officer’s FCA Whistleblower Retaliation Claim

Posted in False Claims Act

USCA6thLast week, the U.S. Court of Appeals for the Sixth Circuit rejected a former compliance officer’s whistleblower retaliation claim because she did not establish that she had an objectively reasonable belief that she was investigating illegal conduct when her employment was terminated. Continue Reading

SEC Pays Whistleblower Bounty Award Exceeding $325,000

Posted in SEC

secOn November 4, 2015, the SEC announced that it would pay a former investment firm employee a whistleblower bounty award totaling more than $325,000.  Notably, the SEC’s Order indicated that the award was decreased “because after becoming aware of the wrongdoing, [the whistleblower] did nothing to report the information and did nothing to try to stop the violations from continuing to occur, which under the facts and circumstances, we find unreasonable.”  Continue Reading

N.D. Cal.: Internal Whistleblowers Are Protected and May Sue Individual Directors

Posted in Dodd Frank, SOX Whistleblower Decisions

NDCalOn October 23, 2015, the U.S. District Court for the Northern District of California largely denied a motion to dismiss a whistleblower retaliation claim brought by a company’s former general counsel, ruling that:  (I) the SOX and Dodd-Frank anti-retaliation provisions provide for individual liability against board members; and (ii) the Dodd-Frank anti-retaliation provision protects internal whistleblowers.  Wadler v. Bio-Rad Laboratories, Inc., 2015 U.S. Dist. LEXIS 144468 (N.D. Cal. Oct. 23, 2015). Continue Reading

New UK Regulations to Govern Whistleblowing in Financial Institutions

Posted in International

UK Flag UK FlagThis month, the FCA and PRA announced a new regime for whistleblowing that will start to be phased in from March 2016. This is part of the broader desire on the part of the UK regulators to encourage individuals to raise concerns and challenge poor practice and behaviors within the financial institutions. The regulations build-on and formalize examples of good practice within the financial services industry. Continue Reading

Cal. App. Court Finds in Favor of Whistleblower Who Never Complained of Unlawful Conduct by the Employer

Posted in State-Specific Whistleblower Claims

caIn Cardenas v. M. Fanaian, D.D.S., Inc., Case No. F069305 (Cal. App. 5 Dist.), a California Court of Appeal determined that Plaintiff Cardenas could pursue a California Labor Code Section 1102.5 retaliation claim against her former employer, M. Fanaian, D.D.S., Inc. (“Company”) based on her allegation that it discharged her because she reported her coworker’s alleged theft of her property to law enforcement authorities—a complaint that did not implicate any wrongdoing by the Company itself. Continue Reading