Category Archives: SEC

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E.D. Virginia Tosses Dodd-Frank Whistleblower Claim for Lack of SEC Complaint

The U.S. District Court for the Eastern District of Virginia recently granted a Rule 12(b)(6) motion to dismiss a Dodd-Frank whistleblower retaliation claim brought by an ex-project manager, finding that Plaintiff failed to allege that her protected activity involved any disclosures to the SEC.  Smith v. Raytheon Co., No. 17-cv-00438 (E.D. Va. Aug. 11, 2017).… Continue Reading

SEC Issues Award To Whistleblower Despite Culpability And Delay

On July 27, 2017, the SEC announced that it was paying a $1.7 million bounty award to a whistleblower, even though the whistleblower: (1) had some culpability in the fraud; (2) unreasonably delayed reporting the fraud; and (3) failed to comply with a Dodd-Frank rule requiring whistleblowers to submit inside information in writing in certain … Continue Reading

N.D. Illinois Dismisses Dodd-Frank Whistleblower Claim For Lack Of Complaint To The SEC

On June 7, 2017, the U.S. District Court for the Northern District of Illinois dismissed a whistleblower retaliation claim under the Dodd-Frank Act because the plaintiff failed to report his complaint of alleged securities violations to the SEC. Martensen v. Chicago Stock Exchange, Case No. 17-cv-1494 (N.D. Ill.) (Shadur, J.) Plaintiff worked as a supervisor … Continue Reading

The First Hundred Days: Whistleblowing in the New Administration

With the new administration comes a new era for whistleblowing. High-risk whistleblower complaints implicating Dodd-Frank, Sarbanes-Oxley and similar state whistleblower retaliation statutes continue to rise. These complaints often rise to the highest levels of a company’s legal and compliance functions, as they present significant financial and reputational risks. Proskauer’s Lloyd Chinn and Harris Mufson recently … Continue Reading

SEC Issues Another Whistleblower Bounty Award

On May 2, 2017, the Securities and Exchanges Commission issued a Dodd-Frank whistleblower award of more than $500,000 to an unidentified company employee.  According to the SEC, the individual reported information that prompted an SEC investigation and resulted enforcement action by the agency.  Jane Norberg, Chief of the SEC’s Office of the Whistleblower stated that … Continue Reading

SEC Announces First Whistleblower Award During Trump Era

On April 25, 2017, the Securities and Exchange Commission issued a Dodd-Frank whistleblower award of nearly $4 million.  This was the first bounty award that was issued from start-to-finish (i.e. from the preliminary determination stage through final order) since Trump’s inauguration.  To maintain the whistleblower’s confidentiality, the SEC declined to disclose the organization involved.  The agency did acknowledge, however, that … Continue Reading

Third Circuit Revives In-House Attorney’s Whistleblower Claim

On April 12, 2017, the Third Circuit partially revived a former in-house attorney’s whistleblower retaliation lawsuit against his previous employer.  Danon v. Vanguard Group, Inc., No. 16-cv-2881. Plaintiff, a former in-house tax lawyer, previously raised retaliation claims against the Company in New York State Court under the New York False Claims Act, alleging he was … Continue Reading

SEC Reduces Whistleblower Bounty Based On Culpability And Delayed Reporting

On February 28, 2017, in an Order almost entirely devoid of detail, the SEC announced that a whistleblower will receive 20% of any monetary sanctions collected in an enforcement action commenced as a result of the whistleblower’s tip. The SEC is giving this “reduced” award while acknowledging that the whistleblower (1) was “culpable” in the … Continue Reading

Proskauer to Present on Modern Whistleblower Retaliation Law and the SEC Bounty Program at Bloomberg’s BNA Webinar

On Friday, March 3, 2017, Proskauer Partner Steve Pearlman will present on key aspects of modern whistleblower retaliation law, SEC enforcement actions involving “pre-taliation,” and the SEC Office of the Whistleblower bounty program. Pearlman is the co-head of the Whistleblowing & Retaliation Group.  He will join co-panelist Sean X. McKessy, Partner, Phillips & Cohen LLP, … Continue Reading

Proskauer Joins Heads of SEC & OSHA Whistleblower Programs in Webinar

On September 27, 2016, Proskauer Partner Steven J. Pearlman, co-head of the Whistleblowing & Retaliation Practice Group, participated in a Bloomberg webinar with Jane Norberg, Acting Chief of the SEC Office of the Whistleblower, MaryAnn Garrahan, Director of OSHA’s Whistleblower Protection Program, and plaintiff-side practitioner, Jason Zuckerman.  The participants discussed: the SEC Whistleblower Reward Program; … Continue Reading

Whistleblower’s Attorney’s Communications with Regulators Found to be Protected by Work Product Doctrine

A California Magistrate Judge in BofI Federal Bank v. Erhart ruled that a whistleblower’s attorney’s communications sent to federal regulators were protected by the attorney work product doctrine.  No. 15-cv-2353 (S.D. Cal. Aug. 5, 2016).  The court concluded that the whistleblower’s attorney had not waived work product protection through her disclosure to third-party regulators, finding that she … Continue Reading

SEC Penalizes Company For Severance Language Purportedly Impeding Complaints

On 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.  … Continue Reading

SEC Affirms Denial of Bounties to Three Purported Whistleblowers

On 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 … Continue Reading

SEC Whistleblower Chief Sean McKessy to Leave, Agency Announces

The 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 … Continue Reading

SEC Issues $17 Million Whistleblower Award

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 … Continue Reading

No Bounty For Purported Whistleblower Tipster

On 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 … Continue Reading
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