Proskauer Whistleblower Defense

Tag Archives: Dodd-Frank

SEC Votes in Favor of Proposal to Amend Whistleblower Rules to Comport with U.S. Supreme Court’s Holding in Digital Realty Trust

By Lloyd B. Chinn and Bassam Gergi on Posted in Dodd Frank, SEC
On June 28, 2018, the U.S. Securities and Exchange Commission (“SEC” or “Commission”) voted in an open meeting on several final rules and rule proposals that will have a material impact on the Commission’s whistleblower program. Most notably, the SEC approved a rule proposal that would modify its Rule 21F, which defines who is a … Continue Reading

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

By Lloyd B. Chinn and Meika Freeman on Posted in Dodd Frank, 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

By Steven J. Pearlman and Annabel Pollioni on Posted in Dodd Frank
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

By Lloyd B. Chinn, Harris Mufson and Bassam Gergi on Posted in Dodd Frank, SEC, SOX Whistleblower Decisions
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

By Steven J. Pearlman and Brett Schwab on Posted in Dodd Frank
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

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

By Steven J. Pearlman and Marissa A. Mastroianni on Posted in Dodd Frank, SEC, SOX Whistleblower Decisions
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

By Steven J. Pearlman and Marissa A. Mastroianni on Posted in Dodd Frank
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

By Steven J. Pearlman and Brett Schwab on Posted in Dodd Frank, SEC, State-Specific Whistleblower Claims
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

By Steven J. Pearlman and Amanda Wiley on Posted in Dodd Frank, SOX Whistleblower Decisions, State-Specific Whistleblower Claims
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

By Steven J. Pearlman and Brett Schwab on Posted in Dodd Frank
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

By Steven J. Pearlman and Pietro Deserio on Posted in Dodd Frank, SOX Whistleblower Decisions
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

By Steven J. Pearlman and Jay M. Cohen on Posted in Dodd Frank, SEC
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

Federal Court Compels Arbitration of Dodd-Frank Whistleblower Claim

By Harris Mufson and Jay M. Cohen on Posted in Dodd Frank
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

By Lloyd B. Chinn, Harris Mufson and Brett Schwab on Posted in Dodd Frank
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

By Lloyd B. Chinn and Sunghee Sohn on Posted in 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

By Steven J. Pearlman and Edward Young on Posted in Dodd Frank, SEC, State-Specific Whistleblower Claims
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

By Proskauer Whistleblower Blog on Posted in Dodd Frank, Legislation, SEC
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

Texas District Court Dismisses SOX Whistleblower Claim For Lack of Protected Activity

By Lloyd B. Chinn and Emilie Adams on Posted in Dodd Frank, SOX Whistleblower Decisions
On March 21, 2017, the Northern District of Texas dismissed a former employee’s whistleblower retaliation claim on the ground that her allegations of fraud were too far removed from potentially harming the shareholders of a publicly-traded company to be covered under SOX’s anti-retaliation protections. Brown v. Colonial Savings, F.A., No. 4:16-cv-00884 (N.D. Tex. Mar. 21, … Continue Reading

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

By Steven J. Pearlman on Posted in Dodd Frank, SEC
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

No Bounty For Purported Whistleblower Tipster

By Lloyd B. Chinn and Christopher Bouriat on Posted in Dodd Frank, SEC
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

FINRA Rule Amended: Whistleblower Claims Not Subject To Mandatory Arbitration

By Steven J. Pearlman, Lloyd B. Chinn and Harris Mufson on Posted in FINRA
The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd Frank)  amended the whistleblower provision in Section 806 of the Sarbanes-Oxley Act of 2002 (SOX) to state that pre-dispute arbitration agreements that require arbitration of a dispute arising under that section are invalid and unenforceable, and that Section 806 rights cannot be waived through a … Continue Reading

SEC Annual Report: Thousands of Tips, One Award & Minimal Transparency

By Steven J. Pearlman, Lloyd B. Chinn and Rachel Fischer on Posted in SEC
In its Annual Report on the Dodd-Frank Whistleblower Program (Report), the SEC has revealed that it has received 3,001 tips during its 2012 fiscal year (the first year of this program), and it paid out its first award to a whistleblower in 2012. Pursuant to Section 922 of the Dodd-Frank Wall Street Reform and Consumer … Continue Reading

ARB Says “Convenience Leave” Letter Does Not Trigger SOX Statute of Limitations

By Lloyd B. Chinn, Steven J. Pearlman and Daniel Saperstein on Posted in SOX Whistleblower Decisions
On August 31, 2012, the Administrative Review Board (ARB) of the U.S. Department of Labor (DOL) liberally interpreted the standard governing when the SOX statute of limitations clock starts ticking, ruling that a letter informing Complainant Kenneth Poli that he was being placed on a “convenience leave” was not a “final, definitive and unequivocal” notice … Continue Reading
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