Important Whistleblower Litigation

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Severance Agreements Cannot Dissuade Whistleblower Reports

September 2016 The Securities and Exchange Commission (“SEC” or the “Commission”) protects whistleblowers through Rule 21F-17, enacted under the Dodd-Frank Wall Street Reform and Consumer Protection Act, which states that "[n]o person may take any action to impede an individual from communicating directly with the Commission staff about a possible securities law violation.” Prior cases have [...]

CFTC Awarding 8 Figure Whistleblower Awards

May 2016 The U.S. Commodity Futures Trading Commission (“CFTC”) recently announced its largest ever whistleblower award, providing over $10 million to an unnamed individual whose information facilitated a successful CFTC enforcement action regarding violations of the Commodity Exchange Act (“CEA”). The CFTC’s whistleblower program derives from section 748 of the Dodd-Frank Wall Street Reform and [...]

SOX Whistleblower Protection Covers Certain Private Company Employees

March 2014 The Supreme Court has held in the case of Lawson v. FMR LLC that the whistleblower protection available under the Sarbanes-Oxley Act of 2002 (“SOX”) properly extends to employees of privately held contractors and subcontractors who perform work for a public company.  Although the case in question was brought by employees of advisors [...]

DOL Rewrites Sox Whistleblower Provision to a New Employer-Friendly Standard

June 2007 Like most lawsuits, many cases settle for undisclosed amounts. Nevertheless, of almost 1,000 whistleblower cases filed under the Sarbanes-Oxley Act (SOX), not a singe whistleblower has survived the various company appeals and “won” the case formally. The case that might have otherwise been the first employee victory was just overturned. SOX Section 806 [...]

Conflicting Rulings About SOX’s Scope Cause Private Company Employees To Stay With DOL Adjudication

October 2012 The Administrative Review Board (ARB) for the U.S. Department of Labor (DOL) recently issued a decision regarding the scope of the whistleblower protections under Sarbanes-Oxley Act of 2002 (SOX). In Spinner vs. David Landau and Associates, SOX’s whistleblower protections were extended to employees of contractors of publicly-traded companies.  In the Spinner case, the [...]

SOX Whistleblower Protections Again Interpreted Narrowly

May 2011 The Ninth Circuit took a narrow reading of the whistleblower protections provided under Sarbanes-Oxley, and thereby eliminated the applicability of any whistleblower protection. The would-be whistleblowers were two internal auditors at Boeing. Based on the Court’s description: “In January 2007, plaintiffs Matthew Neumann and Nicholas Tides began working as auditors in Boeing’s IT [...]

Ninth Circuit Reinstates More Lenient Standard For Whistleblower Protection

August 2009 Whistleblowers have had a difficult time obtaining the protection afforded under Sarbanes-Oxley (SOX) Section 806. This is largely because the Department of Labor (DOL), who administers whistleblower complaints, has taken positions hostile to employees seeking protection under SOX’s whistleblower provisions. For example, see DOL Rewrites Sox Whistleblower Provision to a New Employer-Friendly Standard. There is [...]

DOL Continues To Ignore And Rewrite Sox’s Whistleblower Law

September 2008 According to records maintained by the Department of Labor (DOL), the government has ruled in favor of whistleblowers 17 times out of 1,273 complaints filed since 2002. Another 841 cases have been dismissed. This data comes from Richard Moberly, a University of Nebraska law professor who has recently had his statistics reported by [...]

U.S. Supreme Court Makes Recovery By Whistleblower Plaintiffs More Difficult

April 2007 The Supreme Court ruled that a qui tam informant cannot receive compensation if he lacked “direct and independent knowledge of the information upon which his allegations were based.” The Court’s ruling substantially increases the risk faced by a qui tam plaintiff, and therefore lessens the financial incentive for potential whistleblowers to come forward. [...]

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