Supreme Court to consider role of Dodd-Frank provision in corporate whistle-blower case

An anti-retaliation provision in the 2010 Dodd-Frank law could insulate publicly traded companies from some whistle-blower lawsuits.
JUN 26, 2017
By  Bloomberg

The U.S. Supreme Court agreed to consider the reach of an anti-retaliation provision in the 2010 Dodd-Frank financial law in a case that could insulate publicly traded companies from some whistle-blower lawsuits. The justices will hear an appeal from Digital Realty Trust Inc., which is fighting a lawsuit by a former company vice president who was fired after complaining about alleged violations of federal securities laws. Digital Realty contends that Dodd-Frank authorized whistle-blower lawsuits only by people who had reported the alleged misconduct to the Securities and Exchange Commission. The fired employee, Paul Somers, lodged his complaint internally. Lower courts are divided on the issue. (More: Trump administration wants to rewrite Dodd-Frank regulations) The Dodd-Frank provision is one of two major federal protections for corporate whistle-blowers. A separate provision in the 2002 Sarbanes-Oxley Act lets workers press claims with the Labor Department, even if they didn't report the alleged violation to the SEC. Dodd-Frank offers advantages for whistle-blowers, authorizing larger awards and allowing more time to file cases. The SEC received more than 4,200 reports of misconduct in 2016. Companies received about 1.3 reports per 100 employees in 2015, Digital Realty said in its appeal, citing a report by Navex Global, an ethics software company. The case, which the court will hear in the nine-month term that starts in October, is Digital Realty v. Somers, 16-1276. (More: Prudential halts some insurance sales through Wells Fargo after ex-employees' whistleblower lawsuit)

Latest News

NASAA moves to let state RIAs use client testimonials, aligning with SEC rule
NASAA moves to let state RIAs use client testimonials, aligning with SEC rule

A new proposal could end the ban on promoting client reviews in states like California and Connecticut, giving state-registered advisors a level playing field with their SEC-registered peers.

Could 401(k) plan participants gain from guided personalization?
Could 401(k) plan participants gain from guided personalization?

Morningstar research data show improved retirement trajectories for self-directors and allocators placed in managed accounts.

UBS sees a net loss of 111 financial advisors in the Americas during the second quarter
UBS sees a net loss of 111 financial advisors in the Americas during the second quarter

Some in the industry say that more UBS financial advisors this year will be heading for the exits.

JPMorgan reopens fight with fintechs, crypto over fees for customer data
JPMorgan reopens fight with fintechs, crypto over fees for customer data

The Wall Street giant has blasted data middlemen as digital freeloaders, but tech firms and consumer advocates are pushing back.

The average retiree is facing $173K in health care costs, Fidelity says
The average retiree is facing $173K in health care costs, Fidelity says

Research reveals a 4% year-on-year increase in expenses that one in five Americans, including one-quarter of Gen Xers, say they have not planned for.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.