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Aug 11, 2015 by |

SEC Issues Clarifications on Whistleblower Protections


The Securities and Exchange Commission issued guidance this week regarding their whistleblower protections. This reinforced their stance that whistleblowers are protected against retaliation even if they report internally within their company, rather than to the agency, first.

The Dodd-Frank Act, which created the SEC whistleblower program, had whistleblower provisions stating that whistleblowers who reported wrongdoing to the SEC would be protected against retaliation. The SEC has always maintained that these protections extend to whistleblowers who report problems internally first.

This stance conflicts with a Fifth Circuit ruling last year that upheld the position that whistleblower protections only extend to those who first report to the SEC. There is a similar case pending in the Second Circuit as well. Should the ruling of the Second Circuit case differ from the Fifth Circuit ruling, the issue could potentially go to the US Supreme Court.

The definition of a whistleblower itself is in question, with some saying that the act of reporting to the SEC is what makes someone a whistleblower. The question gets complicated because in the whistleblower retaliation section of Dodd-Frank, it says complaints submitted internally first to the company are protected by the Sarbanes-Oxley Act. Whistleblowers would be more likely to pursue a claim under Dodd-Frank than Sarbanes-Oxley, as there is a longer statute of limitations and the potential to be awarded more money.

The SEC’s guidance should increase the likelihood that courts will view whistleblower protections in the same way that the agency does. Regardless, whistleblowers should be able to report violations internally with more confidence, knowing that they are protected by the SEC if internal reporting does not work.

Evans Law Firm, Inc. handles whistleblower and qui tam/False Claims Act lawsuits, including SEC and IRS whistleblower claims. If you have a potential whistleblower claim, please contact Evans Law Firm, Inc. at 415-441-8669 or via email at

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