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Court ruling limits scope of SEC whistleblower reporting

Joe Mont | February 27, 2018

The U.S. Supreme Court, with an opinion in the case of Digital Realty Trust, Inc. v. Somers, narrowed the definition of employees classified as “whistleblowers” and protected by anti-retaliation measures of the Dodd-Frank Act. The ruling places limitations on the Securities and Exchange Commission’s whistleblower program, requiring reporting to the Commission before receiving its protections and incentives.

“The Supreme Court followed the plain meaning of Dodd-Frank: that whistleblowers are those who report to the SEC,” says Anne Patin, a partner at Seward & Kissel. “In doing so, the Court explained that the purpose of the statute was to aid the SEC’s enforcement efforts by protecting those who report to the SEC.”

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...

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