The plaintiff sued under the anti-retaliation provisions, and the defendants moved to dismiss, arguing that, because the plaintiff did not report the violations to the SEC, but rather only internally, he could not be a protected whistleblower under the statute. The court held that to have a successful claim under the anti-retaliation provisions of the whistleblower provisions of Dodd-Frank, a plaintiff must either allege that his information was reported to the SEC, or that his disclosures fell under one of the four categories of disclosures delineated by 15 U.S.C. § 78u-6(h)(1)(A)(iii) that do not require such reporting-i.e., those under the Sarbanes-Oxley Act, the Securities Exchange Act, 18 U.S.C. § 1513(e), or other laws and regulations subject to the jurisdiction of the SEC. The court also held that a plaintiff can invoke the anti-retaliation protections of the Dodd-Frank Act if, rather than reporting personally and directly to the SEC, he or she does so jointly with another party, such as an investigating law firm, and can establish that a report to the SEC actually was made.

r her company’s internal compliance program will be considered a factor that may result in a larger award, and interference with internal procedures may be a factor that can decrease an award. In addition, the rules provide that whistleblower information initially reported internally but subsequently reported to the SEC within 120 days will be deemed to have been reported to the SEC on the date of the initial internal report, thus preserving the initial date and “place in line” for a possible award from the SEC.Early Decision under Dodd-Frank Act Permits Plaintiff to Proceed with Retaliation ClaimIn the first decision to address the anti-retaliation provisions of the Dodd-Frank Act, Judge Leonard Sand of the Southern District of New York interpreted the anti-retaliation provisions of the Dodd-Frank Act broadly to cover not only whistleblowers who “provide information” to the SEC, but also individuals whose disclosures are “required or protected” under SOX, the Securities Exchange Act, 18 U.S.C. § 1513(e), or any other law, rule, or regulation subject to the SEC’s jurisdiction. Egan v. TradingScreen, Inc., 2011 WL 1672066 (S.D.N.Y. May 4, 2011).Plaintiff, a former employee of a private company named TradingScreen, Inc., alleged that after he reported to his employer that the company’s CEO had been diverting corporate assets to another company, the company engaged outside counsel to conduct an internal investigation, which ultimately confirmed the plaintiff’s allegations.

OWB Report, supra note 1, at 10-11.24.Id. at 11.25.Id. at 18.26.Id.27.Id. at 2.28.Id. at 18.29.Id. at 23, 31.30.Id. at 24.31.Id. at 24, 32.32.Id. at 24, 33.33. Section 21F provides that no employer may “discharge, demote, suspend, threaten, harass, directly or indirectly, or in any other manner discriminate against a whistleblower in the terms and conditions of employment because of any lawful act done by the whistleblower” in (i) providing information to the SEC, (ii) “initiating, testifying in, or assisting in any investigation or judicial or administrative action” of the SEC based upon that information, (iii) making disclosures that are required or protected under the Sarbanes-Oxley Act of 2002, the Exchange Act, 18 U.S.C. § 1513(e) [relating to the commission or a criminal offense], or any other statute or rule subject to the SEC’s jurisdiction. 15 U.S.C. § 78u-6(h)(A).

The Mueller Report left open the question of whether President Trump obstructed or attempted to obstruct any legal investigation into the Russian interference issue.Obstruction of JusticeFederal obstruction of justice laws are numerous, difficult to apply, and not unexpectedly often misapplied. The six core statutes most often used by federal prosecutors are:18 U.S.C. 1503 – obstruction of judicial proceedings;18 U.S.C. 1505 – obstruction of congressional or administrative inquiry;18 U.S.C. 1512 – witness tampering;18 U.S.C. 1513 – witness retaliation;18 U.S.C. 1001- false statement in any matter within jurisdiction of executive, legislative or judicial branch; and18 U.S.C. 371 – conspiracy to commit one of the above or any other criminal act.The media and other sources have outlined the numerous ways in which President Trump possibly obstructed justice. The obstruction statute most applicable to the inquiry surrounding the President, based on information known to the general public, is 18 U.S.C. 1505.

See, e.g., Vannoy v. Celanese Corp., ALJ Case No. 2008-SOX-00064, ARB Case No. 09-118 (ALJ July 24, 2013) (finding that IRS whistleblower’s removal of confidential company data to support his whistleblower complaints constituted protected activity under SOX). Moreover, retaliation against IRS whistleblowers could have criminal implications: 18 U.S.C. § 1513(e) provides that “Whoever knowingly, with the intent to retaliate, takes any action harmful to any person, including interference with the lawful employmentor livelihood of any person, for providing to a law enforcement officer any truthful information relating to the commission or possible commission of any Federal offense, shall be fined under this title or imprisoned not more than 10 years, or both.” Thus, employers should handle IRS whistleblowing with the same level of care, consideration, and escalation than it would any other type of whistleblowing.

§78u–6(b)–(g). And, most relevant here, a whistleblower is protected from retaliation for, inter alia, “making disclosures that are required or protected under” Sarbanes-Oxley, the Securities Exchange Act of 1934, the criminal anti-retaliation proscription at 18 U. S. C. §1513(e), or any other law subject to the SEC’s jurisdiction. 15 U. S. C. §78u–6(h)(1)(A)(iii).This is a little complicated, so let’s break it down: An employee who knows about violations of securities laws and complains about them is entitled to be free from retaliation is be entitled to a reward for reporting the violations to the SEC.

A Dodd-Frank whistleblower is eligible for an award if original information he or she provides to the SEC leads to a successful enforcement action. Moreover, a Dodd-Frank whistleblower is protected from retaliation for, among other things, “making disclosures that are required or protected under” Sarbanes-Oxley, the Securities Exchange Act of 1934, the criminal anti-retaliation proscription at 18 U. S. C. §1513(e), or any other law subject to the SEC’s jurisdiction. Because the Court found the statute to be unambiguous, it did not accord any deference to the rules promulgated by the SEC that left room for internal whistleblowers.

Sarbanes-Oxley defines “whistleblowers” as individuals who report misconduct to the Commission, other federal agencies, Congress, or an internal supervisor, while Dodd-Frank applies a more limited definition of “whistleblower” to include only persons who provide “information relating to a violation of the securities laws to the Commission.” Dodd-Frank then affords qualifying whistleblowers protection from retaliation in three different circumstances: (i) “in providing information to the Commission in accordance with [the whistleblower provision of Dodd-Frank],”; (ii) “in initiating, testifying in, or assisting in any investigation or . . . action of the Commission based upon” information provided to the Commission in accordance with the whistleblower provision; and (iii) “in making disclosures that are required or protected under” Sarbanes-Oxley, the Securities Exchange Act of 1934, the criminal anti-retaliation prohibition at 18 U.S.C. §1513(e) or “any other law, rule, or regulation subject to the jurisdiction of the Commission.” Although this third clause protects qualifying whistleblowers from retaliation for disclosures made to authorities other than the Commission, lower courts had been divided over whether the clause effectively expanded the definition of “whistleblower” to include those who reported to authorities other than the Commission.

[3] However, other circuit courts, including the Fifth Circuit Court of Appeals, have held that Dodd-Frank’s anti-retaliation provision protects whistleblowers only when they report wrongdoing to the SEC.[4]The disagreement among the circuit courts stems from interpretation of Section 21F(h)(1)(A)(iii) of the Securities Exchange Act of 1934 (“Exchange Act”), as promulgated under Dodd-Frank. This provision prohibits employers from retaliating against “whistleblowers” for, among other things, “making disclosures that are required or protected under” Sarbanes-Oxley, the Exchange Act, 18 U.S.C. § 1513(e), “and any other law, rule, or regulation subject to the jurisdiction of the Commission.”[5] Among other laws, rules and regulations, several provisions of Sarbanes-Oxley require or protect reporting of alleged securities violations internally, without regard to further reporting to the SEC.[6]At the same time, Section 21F(a)(6) of the Exchange Act limits the definition of “whistleblower” to “any individual who provides . . . information relating to a violation of the securities laws to the Commission.”

In arguing that his termination violated the Act, Somers concedes that the definition of “whistleblower” in § 78u-6(a)(6) plainly requires external reporting to the SEC, but maintains that this definition is ill-suited to the anti-retaliation provisions. Specifically, Somers points to a clause (“Clause (iii)”) that protects a whistleblower from retaliation because of the whistleblower’s lawful conduct “in making disclosures that are required or protected under the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7201 et seq.), this chapter . . . [the federal criminal witness tampering statute (18 U.S.C. § 1513(e)], and any other law, rule, or regulation subject to the jurisdiction of the [SEC].” 15 U.S.C. § 78u-6(h)(1)(A)(iii).