Whistleblower Watch

Whistleblower Watch

Reports and Analysis of Developments in Whistleblower Law

Category Archives: Securities & Exchange Commission (SEC)

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Second-Largest Whistleblower Award Issued by SEC

Posted in Dodd-Frank Act (Dodd-Frank), Securities & Exchange Commission (SEC)
Last week, the SEC awarded more than $17 million to a single former corporate executive who provided a “detailed tip” regarding securities law violations by a financial services company.  Four other individuals made claims in the case, which the SEC denied because their information did not lead to successful enforcement of the securities law violations.   … Continue Reading

2015 SEC Whistleblower Report Highlights Successes and Trends

Posted in Dodd-Frank Act (Dodd-Frank), Securities & Exchange Commission (SEC)
In November, the Securities and Exchange Commission issued its 2015 annual report to Congress on the agency’s Dodd-Frank Whistleblower Program. The report notes an increased number of tips made by whistleblowers to the SEC — up 8% from last year and 30% since 2012.  The statistics in the report also provide an interesting profile of… Continue Reading

Second Circuit Creates Circuit Split Over Internal Whistleblowers

Posted in Dodd-Frank Act (Dodd-Frank), Securities & Exchange Commission (SEC), Whistleblower Retaliation
The Second Circuit ruled in Berman v. Neo@Ogilvy LLC that a whistleblower whose employment was terminated after he raised concerns internally at his company, rather than filing a formal complaint with the SEC, was protected from retaliation under the Dodd-Frank Act. While recognizing that the statutory protections do not clearly cover internal complainants, the Second… Continue Reading

SEC Continues Efforts to Protect Internal Whistleblowers under Dodd-Frank

Posted in Dodd-Frank Act (Dodd-Frank), Securities & Exchange Commission (SEC)
The SEC recently issued interpretative guidance addressing an issue vexing courts since the passage of Dodd-Frank: whether the statute covers those individuals who only report concerns internally and fail to report to the SEC. In the guidance, the SEC concedes that the statutory language is “ambiguous” but attempts to clarify its view of the scope… Continue Reading

SEC Awards More Than $3 Million to Whistleblower

Posted in Dodd-Frank Act (Dodd-Frank), Securities & Exchange Commission (SEC)
Last Friday, the SEC awarded over $3 million to a whistleblower as part of the Dodd-Frank Act whistleblower bounty program. This is the third largest award issued to date, behind an award of $30 million last year and an award of $14 million in 2013. Consistent with its practice of protecting the confidentiality of whistleblowers, the… Continue Reading

New Article Addressing Federal Agency Attacks on Confidentiality Policies and Agreements

Posted in Dodd-Frank Act (Dodd-Frank), Internal Investigations, Securities & Exchange Commission (SEC), Whistleblower Retaliation
Crowell attorneys Tom Gies and Chris Calsyn authored an article for Crowell’s Mining Law Monitor discussing the recent spate of government agency attacks on standard employer confidentiality policies and agreements.  The SEC in particular claims that such policies and agreements may impermissibly stifle putative whistleblowers from reporting their concerns to appropriate government agencies.  The article… Continue Reading

SEC Announces Whistleblower Award in First Retaliation Enforcement Action

Posted in Dodd-Frank Act (Dodd-Frank), Securities & Exchange Commission (SEC), Whistleblower Retaliation
The SEC recently announced its first award under the Dodd-Frank anti-retaliation regulations.  The whistleblower alleged that he was demoted and stripped of his authority after his employer, Paradigm Capital Management, Inc., learned that he complained to the SEC that Paradigm engaged in improper trading practices.  The whistleblower will receive $600,000.  This amount equals 30 percent of… Continue Reading

SEC Issues Its Second Dodd-Frank Whistleblower Award to a Compliance Employee

Posted in Dodd-Frank Act (Dodd-Frank), Securities & Exchange Commission (SEC)
Earlier this week, the SEC announced an award of $1.4 to 1.6 million under the Dodd-Frank whistleblower bounty provisions to an individual responsible for compliance in his or her company. We wrote about the first award to a compliance employee last September. This second award is approximately five times larger than the first award, which… Continue Reading

April 16 Webinar: The SEC Challenges Employer Confidentiality Protections

Posted in Dodd-Frank Act (Dodd-Frank), Events, Sarbanes-Oxley Act (SOX), Securities & Exchange Commission (SEC)
Please join us on Thursday, April 16 at 12 p.m. Eastern for the Crowell & Moring Labor & Employment group’s monthly “Third Thursday” webinar.  This month’s topic is the SEC’s recent scrutiny of employer confidentiality protections.  Our panel will include Tom Gies and Chris Calsyn of the Firm’s Labor & Employment group, as well as Dan… Continue Reading

SEC Claims Employer’s Confidentiality Agreement Muzzles Whistleblowers; Orders Change to Agreement and $130,000 Fine

Posted in Internal Investigations, Securities & Exchange Commission (SEC), Whistleblower Retaliation
The SEC issued a cease and desist order to KBR, Inc. this week requiring the company to revise the confidentiality agreement it insists witnesses sign during internal investigations. The SEC also imposed a $130,000 fine. This announcement comes on the heels of a recent report that the SEC is scrutinizing non-disclosure, confidentiality and other agreements to determine… Continue Reading

“Watch List” Update: 2nd Circuit Affirms SEC’s Denial of Award to Pre-Dodd-Frank Tipster

Posted in Dodd-Frank Act (Dodd-Frank), Securities & Exchange Commission (SEC)
Following up on a case we first reported on in October 2014, the Second Circuit recently affirmed the SEC’s refusal to grant an award to a tipster who provided information to the SEC prior to when the Dodd-Frank Act took effect.  In Stryker v. Securities and Exchange Commission, the plaintiff was seeking an award under… Continue Reading

SEC Ramps Up Dodd-Frank Enforcement by Scrutinizing Employer Confidentiality Restrictions and Financial Award Waivers

Posted in Securities & Exchange Commission (SEC)
As recently reported in the Wall Street Journal (subscription required), the SEC has sent information requests to several publicly-traded companies.  The letters demand production of the firms’ non-disclosure agreements, employment agreements, severance and release agreements, and other related documents.  The requests allegedly also seek copies of any other documents that attempt to restrict the ability… Continue Reading

Former Company Officer Awarded up to $575,000 by SEC

Posted in Dodd-Frank Act (Dodd-Frank), Internal Investigations, Securities & Exchange Commission (SEC)
The Securities and Exchange Commission announced yesterday its first whistleblower award to a former company officer who learned about the fraud from another employee. The award, which will be between $475,000 and $575,000, follows on the heels of the SEC’s award to a whistleblower who performed audit and compliance functions. Yesterday’s announcement is noteworthy because… Continue Reading

“Watch List”: SEC Argues in 2nd Circuit That Internal Whistleblowers Are Protected Under Dodd-Frank

Posted in Dodd-Frank Act (Dodd-Frank), Securities & Exchange Commission (SEC), Whistleblower Retaliation
Late last week the Securities and Exchange Commission (SEC) filed an amicus brief urging the Second Circuit to extend protection under the anti-retaliation provisions of the Dodd-Frank Act to individuals who only report complaints internally to their employer, and not to the SEC. If the Second Circuit sides with the SEC and plaintiff in Berman… Continue Reading

NYT: The Positives and Negatives of Increased Whistleblowing

Posted in Department of Justice (DOJ), Dodd-Frank Act (Dodd-Frank), False Claims Act (FCA), Securities & Exchange Commission (SEC)
The New York Times just published an article by Professor Steven Davidoff Solomon of the University of California at Berkeley School of Law that explores both the positive aspects of increased whistleblowing in recent years, as well as the perverse incentives that increased rewards for whistleblowers are creating in some people. The article is available… Continue Reading

“Watch List”: SEC Files Amicus Brief in Debate Over Internal Whistleblower Protection Under Dodd-Frank

Posted in Dodd-Frank Act (Dodd-Frank), Securities & Exchange Commission (SEC), Whistleblower Retaliation
On December 11, 2014, the SEC filed an amicus brief in the closely watched Safarin v. American DG Energy case currently pending in the Third Circuit. The SEC’s brief encourages the court to rule that the Dodd-Frank anti-retaliation protections extend to whistleblowers that report their concerns internally, but fail to report them to the SEC.… Continue Reading

NYT: Rise of The Whistleblower

Posted in Department of Justice (DOJ), Dodd-Frank Act (Dodd-Frank), False Claims Act (FCA), Internal Revenue Service (IRS), Securities & Exchange Commission (SEC), Whistleblower Retaliation
The New York Times recently published an article by Professor Peter Henning of Wayne State University Law School regarding the rise of the whistleblower in recent years due to increased statutory protection and redoubled enforcement efforts by various federal agencies. The article is available here.… Continue Reading

SEC Highlights Successes of Dodd-Frank Whistleblower Program to Congress

Posted in Dodd-Frank Act (Dodd-Frank), Securities & Exchange Commission (SEC)
Yesterday, the Securities and Exchange Commission (SEC) issued its annual report to Congress on the agency’s Dodd-Frank Whistleblower Program. The report details the increased success the program had in 2014, including that it paid awards to nine whistleblowers, as compared to the five awards total in the prior years since the program was established in… Continue Reading

“Watch List”: Pre-Dodd-Frank Tipster Seeks Bounty in 2nd Circuit

Posted in Dodd-Frank Act (Dodd-Frank), Securities & Exchange Commission (SEC)
The Second Circuit recently heard oral argument in a case in which a whistleblower who provided information to the SEC before the Dodd-Frank Act seeks payment of an award under the Act’s bounty provisions. In Stryker v. U.S. Securities and Exchange Commission, Larry Stryker is appealing the SEC’s denial of his claim for an award… Continue Reading

SEC Announces Record $30-35 Million Whistleblower Award

Posted in Dodd-Frank Act (Dodd-Frank), Securities & Exchange Commission (SEC)
The SEC announced last week that it is poised to pay out a record breaking $30-35 million award to a whistleblower. The previous record payment was $14 million, and most of the payouts under the Dodd-Frank Act’s bounty provisions have been well under $1 million. This latest award should serve as a wake-up call to… Continue Reading

“Watch List”: 8th Circuit Rejects Opportunity to Address Debate Over Internal Whistleblower Protection Under Dodd-Frank

Posted in Dodd-Frank Act (Dodd-Frank), Securities & Exchange Commission (SEC), Whistleblower Retaliation
Just like the Second Circuit a few weeks ago, the Eighth Circuit recently refused to wade into the debate over whether an employee who reports concerns internally only, and not to the SEC, qualifies as a whistleblower under the Dodd-Frank Act. In Bussing v. COR Clearing LLC, the Eighth Circuit denied the defendant’s motion for… Continue Reading

SEC Announces First Bounty Award Under Dodd-Frank For Audit and Compliance Employee

Posted in Dodd-Frank Act (Dodd-Frank), Securities & Exchange Commission (SEC), Whistleblower Retaliation
The SEC recently announced its first award under Dodd-Frank’s bounty provisions to a whistleblower who worked in the audit and compliance function of a company. The SEC’s award adds fuel to the long simmering debate in whistleblower law as to whether audit and compliance employees are appropriate whistleblower plaintiffs considering their primary function is to… Continue Reading

2nd Circuit Affirms Dodd-Frank Anti-Retaliation Provisions Don’t Extend Beyond U.S., Sidesteps Debate Over Internal Whistleblower Protection

Posted in Dodd-Frank Act (Dodd-Frank), Securities & Exchange Commission (SEC), Whistleblower Retaliation
In Liu v. Siemens AG, the Second Circuit recently followed other courts in finding that the anti-retaliation provisions of the Dodd-Frank Act do not apply to non-U.S. citizens working outside the United States. However, the Second Circuit surprised many by avoiding the growing debate about whether a putative whistleblower is protected by Dodd-Frank if he… Continue Reading