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Supreme Court weighs in on SEC's whistleblower program

Joe Mont | February 21, 2018

The Supreme Court this week placed limitations on the Securities and Exchange Commission’s whistleblower program. The case is Digital Realty Trust, Inc. v. Somers.

Endeavoring to root out corporate fraud, Congress passed the Sarbanes-Oxley Act of 2002 and the 2010 Dodd-Frank Act. Both Acts shield whistleblowers from retaliation, but they differ in important respects, the Court wrote.  Sarbanes-Oxley applies to all “employees” who report misconduct to the Securities and Exchange Commission, any other federal agency, Congress, or an internal supervisor.

Dodd-Frank defines a “whistleblower” as “any individual who provides information relating to a violation of the securities laws to the Commission, in a manner established, by rule or regulation, by the Commission.”

A whistleblower is eligible for an award if original information provided to the SEC leads to a successful enforcement action. Sarbanes-Oxley’s anti- retaliation provision contains an...

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