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Lloyd B. Chinn

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Lloyd B. Chinn is a partner in the Labor & Employment Law Department and co-head of the Whistleblowing & Retaliation Group. He litigates employment disputes of all types before federal and state courts, arbitration tribunals (e.g., FINRA, JAMS and AAA), and before administrative agencies in New York and across the country. Lloyd's practice ranges from litigating compensation disputes to defending whistleblower, discrimination and sexual harassment claims. Although he represents employers in a wide range of industries, including law, insurance, health care, consulting, media, education and technology, he focuses a substantial portion of his practice on the financial services sector. He has tried to final verdict or arbitration award substantial disputes in this area.

Due to Lloyd’s litigation experience, clients regularly turn to him for advice regarding the full range of employment matters, including terminations, whistleblower policy and procedure, reductions in force, employment agreements, and employment policies. For example, in the wake of the financial crisis, he has counseled a number of firms through reductions in force and related bonus and deferred compensation disputes. Lloyd has also been retained to conduct internal investigations of allegations of workplace misconduct, including claims leveled against senior executives.

Lloyd has represented global businesses in matters involving Sarbanes-Oxley and Dodd-Frank whistleblower claims. He has taken an active role in the American Bar Association on these issues, currently serving as Co-Chair of the Whistleblower subcommittee of the ABA Employee Rights and Responsibilities Committee. Lloyd has spoken on whistleblowing topics before a numerous organizations, including the American Bar Association, ALI-ABA, Association of the Bar of the City of New York, and New York University School of Law. He has testified twice before Congressional subcommittees regarding whistleblower legislation and has also published blog postings, articles and client alerts on a variety of topics in this area, including the Dodd-Frank Act’s whistleblower provisions. Lloyd is a co-editor of Proskauer’s Whistleblower Defense Blog, and he has been widely quoted by on whistleblower topics by a number of publications, including the New York Times, the Wall Street Journal, the National Law Journal and Law 360.

Lloyd has also become active in the International Bar Association, presenting on a variety of subjects, including: the #MeToo movement, the COVID-19 pandemic and employment law, and cross-border harmonization of employment provisions in transactions. Lloyd also hosts a quarterly roundtable discussion among financial services industry in-house employment lawyers. He has also published articles and given speeches on a variety of other employment-law topics, including non-solicitation provisions, FINRA arbitration rules, cross-border discovery, e-discovery, and the use of experts.

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The U.S. District Court for the Eastern District of Wisconsin in Verfuerth v. Orion Energy Systems, Inc., No. 14-cv-352 (E.D. Wis. Nov. 4, 2014) recently ruled that the Dodd-Frank whistleblower protection provision does not protect employees who only report alleged violations of the securities laws internally.  In dismissing a former CEO’s whistleblower retaliation claim, the court followed the Fifth Circuit’s decision in Asadi v. F.E. Energy (USA), L.L.C., 720 F.3d 620 (5th Cir. 2013) and held that the text of the statute requires that a “whistleblower” report an alleged violation to the SEC to be covered by Dodd-Frank’s whistleblower protection provision.

FINRA LogoAs reported this week by Law360 (subscription required), the Financial Industry Regulatory Authority (FINRA) recently issued a reminder (Regulatory Notice 14-40) warning firms against the use of confidentiality provisions in settlement agreements that prohibit or otherwise restrict customers or anyone else (such as current employees) from communicating with the Securities Exchange Commission (SEC), FINRA, or any federal or state regulatory authority regarding a possible securities law violation.

Overseas plaintiffs are continuing to seek to pursue  SOX and Dodd-Frank whistleblower claims.  On September 30, 2014, the Southern District of New York in Ulrich v. Moody’s Corp., 2014 U.S. Dist. LEXIS 138082 (S.D.N.Y. Sept. 30, 2014), dismissed SOX and Dodd-Frank whistleblower claims on the grounds that the statutes’ respective anti-retaliation provisions do not apply extraterritorially.

The Securities and Exchange Commission (SEC) decided that a whistleblower who did not “voluntarily” provide information to the SEC was nonetheless eligible to receive a monetary award of $400,000. The whistleblower’s disclosure was not voluntary under the SEC’s own rules because it occurred after a previous inquiry to the company by a self-regulatory organization.  Nevertheless, the SEC concluded that it was “appropriate in the public interest and consistent with the protection of investors to waive the ‘voluntary’ requirement” and rewarded the whistleblower monetarily.

Posted in SEC

As recently reported by Ed Benson of Law 360, on July 4th, 2014, the United States Securities and Exchange Commission (the “SEC” or “Commission”) issued a final order that denied a whistleblower award claim on the $18 million that the SEC recovered in a settlement agreement with Harbinger Capital Partners LLC (“Harbinger”) and the company’s chief executive Philip Falcone (“Falcone”).

Posted in SEC

On July 18, 2014, a coalition of plaintiff-side lawyers and government watchdog groups proposed ways to strengthen the SEC whistleblower program in two petitions filed with the SEC.  The groups urged the SEC to update Rule 21F-17, which prohibits any action that would “impede” an individual from communicating with the SEC about securities law violations, by expanding its rules governing the use of nondisclosure agreements and increasing the scope of protections for whistleblowers.

The SEC recently issued an Order against Paradigm Capital Management, Inc. (Paradigm), a registered investment adviser, and its principal for allegedly engaging in principal trades without effective client disclosure and consent, and for retaliating against an employee who reported such activity to the SEC.  According to the SEC, this is the first enforcement action it has taken for violations of the Dodd-Frank anti-retaliation provisions.

In the UK, whistleblowing law is based on a statute prohibiting a “worker” being dismissed or subjected to any other detriment because of having made a “protected disclosure”.  Until this week, the general view was that the definition of “worker”, and therefore whistleblowing protection, did not extend to partners. There were many reasons for this view, such as the fact that discrimination legislation (which protects partners as well as other workers), is, in contrast to whistleblowing legislation, explicit as to its application to partners.  However, this week, a landmark Supreme Court decision, Clyde & Co. LLP v. Van Winkelhof (overturning a decision of the Court of Appeal) held that partners were “workers” and therefore legislation protecting whistleblowers applies to partners in the same way that it applies to employees.