One year ago, however, the Supreme Court narrowed the scope of Dodd-Frank whistleblower protection due to an apparent drafting error. In particular, the Court held in Digital Realty Trust, Inc. v. Somers, 138 S. Ct. 767 (2018) that the definition of “whistleblower” in the anti-retaliation provision of the Dodd-Frank Act, 5 U. S. C. §78u– 6(h), requires that an individual report a possible securities law violation to the Securities and Exchange Commission (“SEC”) to qualify for protection against retaliation. As approximately 80% of whistleblowers report internally before reporting to the SEC, Digital Realty significantly weakens Dodd-Frank’s whistleblower protection provision, thereby dissuading whistleblowers from reporting potential securities law violations to their employers.
Congress should amend the anti-retaliation of the Dodd-Frank Act to broaden the scope of protected conduct and correct other deficiencies in the Act’s whistleblower protection provision. In the interim, whistleblowers should carefully assess how they can utilize Dodd-Frank and other remedies, including Section 806 of the Sarbanes-Oxley Act, to combat retaliation. This article provides an overview of protections available for SEC whistleblowers.
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