Category Archives: Dodd Frank

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Federal Court Rules That Providing Testimony to FINRA Is Not Protected Activity Under Dodd-Frank

On April 19, 2018, the United States District Court for the District of New Jersey held that providing testimony to FINRA (which is overseen by the SEC) does not constitute protected activity for purposes of establishing a Dodd-Frank whistleblower claim.  Price v. UBS Financial Services, Inc., No. 2:17-01882. Background.  Plaintiff, a former UBS Private Wealth … Continue Reading

DC Circuit Upholds SEC’s Denial of Dodd-Frank Bounty Award

On March 20, 2018, the DC Circuit upheld the SEC’s denial of a Claimant’s application for a Dodd-Frank whistleblower bounty award because the SEC did not rely on the information provided by the Claimant in pursuing an enforcement action against Management Solutions.   In upholding the SEC determination, for first time, the court identified the standard … Continue Reading

U.S. Supreme Court Holds That Anti-Retaliation Provisions of Dodd-Frank Apply Only to Whistleblowers Who Report to the SEC

On February 21, 2018, the U.S. Supreme Court unanimously ruled that an individual is not covered by the anti-retaliation provision of the Dodd-Frank Act unless they have provided information regarding a violation of law to the U.S. Securities and Exchange Commission. Digital Realty Trust, Inc. v. Somers, No. 10-1276, 583 U.S. ___ (2018). Somers was … Continue Reading

S.D.N.Y Dismisses Dodd-Frank Whistleblower Action

On February 5, 2018, U.S. District Court for the Southern District of New York granted Defendant Khan Funds Management America, Inc.’s Rule 12(b)(6) motion to dismiss a whistleblower retaliation claim under Dodd-Frank on the grounds that Plaintiff failed to state a claim upon which relief could be granted.  Polite v. Khan Funds Mgmt. Am., Inc., 17-cv-2988. … Continue Reading

Seventh Circuit Affirms Grant of Summary Judgment on Terminated CEO’s SOX And DFA Claims

Last week, the Seventh Circuit Court of Appeals held that a terminated CEO’s complaints about his board of directors’ managerial decisions did not qualify as protected whistleblowing under the Sarbanes-Oxley Act of 2002 (“SOX”) nor under the Dodd-Frank Act of 2010 (“DFA”).  Verfuerth v. Orion Energy Sys., Inc., No. 16-3502, 2018 WL 359814 (7th Cir. … Continue Reading

Maryland District Court Denies Summary Judgment on CFPA Whistleblower Claim

The U.S. District Court for the District of Maryland recently denied a motion for summary judgment in a whistleblower retaliation claim under the Consumer Financial Protection Act of 2010 (CFPA), Section 1057 of Dodd-Frank, which was brought by an ex-foreclosure attorney, finding there were issues of material fact as to, among other things, the basis … Continue Reading

SEC Issues $4.1 Million Award to Overseas Whistleblower

On December 5, 2017, the SEC announced a whistleblower award of more than $4.1 million to an overseas former company insider.  The SEC declined to disclose the identity of the whistleblower or the company at issue. The order noted that the tipster voluntarily reported original information that prompted an SEC investigation which uncovered an extensive … Continue Reading

S.D. Fla. Refuses To Dismiss SOX and Dodd-Frank Whistleblower Claims

The Southern District of Florida recently denied a Rule 12(b)(6) motion to dismiss a former employee’s Sarbanes-Oxley and Dodd-Frank whistleblower retaliation claims, finding that the plaintiff sufficiently alleged that she had an objectively reasonable belief regarding alleged securities violations.  Thomas v. Tyco Int’l Mgmt. Co., LLC, No. 16-cv-80501 (Mar. 31, 2017).  This case is noteworthy … Continue Reading

N.D.N.Y. Refuses to Dismiss Dodd-Frank Whistleblower Claim

The Northern District of New York recently denied a Rule 12(b)(6) motion to dismiss a former employee’s Dodd-Frank whistleblower retaliation claim, finding that the plaintiff sufficiently alleged that he had an objectively reasonable belief with respect to alleged securities violations and causation.  McManus v. Tetra Tech Construction, Inc., No. 16-cv-894 (May 11, 2017).… Continue Reading

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

Purported Whistleblower Barred from Pursuing Illinois Retaliatory Discharge Claim

The Northern District of Illinois recently dismissed an Indiana-based employee’s claims for retaliatory discharge in violation of common law pursuant to Illinois public policy, focusing on the nature of the connection (or lack thereof) to Illinois and noting that the plaintiff possessed adequate statutory remedies under federal whistleblower laws.  O’Risky v. Mead Johnson Nutrition Co., … Continue Reading

S.D.N.Y. Dismisses Dodd-Frank Whistleblower Claim Because Retaliation Claims Were Already Arbitrated

The Southern District of New York recently dismissed Dodd-Frank whistleblower retaliation claims brought by an employer’s ex-President and an ex-Director pursuant to Rule 12(b)(6) on res judicata grounds, determining that retaliation claims had already been decided in arbitration and that the Dodd-Frank claims filed in federal court for the first time were therefore barred. Wendt v. … Continue Reading

Ninth Circuit Affirms Dismissal Of Dodd-Frank Whistleblower Case, Using Securities Fraud Standard

The Ninth Circuit recently affirmed a grant of summary judgment in an employer’s favor, dismissing a SOX and Dodd-Frank whistleblower retaliation case based on the plaintiff’s lack of an objectively reasonable belief of violations of securities law.  Rocheleau v. Microsemi Corporation, Inc., 680 Fed. Appx. 533 (2017). Background.  Defendant, a publicly traded company, hired Plaintiff … 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

Tennessee District Court: Dodd-Frank is Not a General Anti-Retaliation Law

The United States District Court for the Western District of Tennessee recently emphasized the limited scope of what constitutes protected activity under the Dodd-Frank Act’s (the Act) whistleblower protection provision, noting that the Act protects only “certain kinds of whistleblowers who report certain kinds of violations.”  Boyle v. Evolve Bank & Trust et al, No. … Continue Reading

Federal Court Compels Arbitration of Dodd-Frank Whistleblower Claim

In a recent decision, the U.S. District Court for the Western District of Wisconsin held that Dodd-Frank whistleblower claims (Section 922 claims) are subject to mandatory arbitration.  Wussow v. Bruker Corp., No. 16-CV-444-WMC, 2017 WL 2805016 (W.D. Wis. June 28, 2017). In Wussow, upon his hire, the plaintiff executed an arbitration agreement in which he … Continue Reading

E.D. Pennsylvania Dismisses Dodd-Frank Whistleblower Claim After Plaintiff Fails to Qualify as a Whistleblower

On July 6, 2017, the U.S. District Court for the Eastern District of Pennsylvania dismissed a whistleblower claim after determining that the plaintiff did not qualify as a whistleblower under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”). Reyher v. Grant Thornton, LLP, No. 16-1757 (E.D. Pa. July 6, 2017). Background The plaintiff, … Continue Reading

U.S. Supreme Court To Review Scope Of “Whistleblower” Under Dodd-Frank

On June 26, 2017, the U.S. Supreme Court agreed to review whether individuals who do not report alleged securities law violations to the U.S. Securities and Exchange Commission are “whistleblowers” protected by the anti-retaliation provision of the Dodd-Frank Act. Somers v. Digital Realty Trust, Inc., 850 F.3d 1045 (9th Cir. 2017), cert. granted, No. 16-1276 … 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

CFTC Amends Whistleblower Rules to Strengthen Anti-Retaliation Protections and Encourage Whistleblower Tips

On May 22, 2017, the U.S. Commodity Futures Trading Commission (“CFTC” or the “Commission”) adopted several additions to its whistleblower rules.  Among other things, the amendments expand the Commission’s power to pursue anti-retaliation claims on behalf of whistleblowers and, like the SEC, now prohibit confidentiality agreements that “impede” a whistleblower’s communications with the CFTC.   The CFTC … Continue Reading

The Northern District of New York Applies the “Reasonable Belief” Standard

On May 11, 2017, the Northern District of New York applied the Second Circuit’s standard for evaluating a Dodd-Frank retaliation claim in response to a motion to dismiss under F.R.C.P. Rule 12(b)(6).  The court denied the employer’s motion to dismiss unlawful retaliation claims brought by a former employee under Dodd-Frank, finding that the whistleblower had … Continue Reading

California Federal Court Upholds $8 Million Jury Verdict In Former General Counsel’s Whistleblower Lawsuit

Recently, a California federal court denied the defendant–employer’s motion for a new trial, upholding the jury’s $7.96 million verdict finding that the Company terminated its former general counsel for reporting alleged Foreign Corrupt Practices Act violations.  See Sanford S. Wadler v. Bio-Rad Labs., Inc. et al., 2017 WL 1910057 (N.D. Cal. May 10, 2017).… Continue Reading
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