Unanimous Supreme Court Declines Broader SEC Whistleblower Protections
Last week, the U.S. Supreme Court unanimously declined to adopt a broader reading of a law designed to protect whistleblowers who report securities laws violations. The Dodd-Frank Act offers protections against retaliation, such as firing and demotions, to employees who report wrongdoing to the Securities and Exchange Commission. The Supreme Court held that while whistleblowers who report misconduct to the SEC fall under Dodd-Frank’s protection, employees who only report the misconduct internally are not protected. Relying on a plain reading of the law’s text, the court noted that Dodd-Frank explicitly defines a whistleblower as an individual or group of employees who provide “information relating to a violation of the securities law” to the SEC.
Far-Reaching Practical Consequences For Whistleblowers
The Supreme Court’s decision carries significant practical consequences. Whistleblowers may be more likely to resolve their complaints by involving the SEC, rather than proceeding only through internal reporting channels. This could increase the SEC’s awareness of securities laws violations and may lead to increased enforcement. Likewise, the SEC, which received 4,400 whistleblower tips in 2017, may see an increase in complaints because potential whistleblowers who are aware of the Supreme Court’s ruling may elect to report wrongdoing in a manner that affords protection against reprisals.
More About Vernon Litigation
Vernon Litigation Group is a team of financial litigators that represent clients in whistleblower claims courtroom litigation, arbitration, and mediation throughout the United States. Our lawyers have collectively represented thousands of investors in FINRA and other securities arbitration and litigation claims nationwide and recovered millions of dollars from financial institutions, both large and small. For more information, visit our website at www.vernonlitigation.com or contact Vernon Litigation Group by phone at 1-877-649-5394 or by e-mail at firstname.lastname@example.org