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