Supreme Court Narrows Whistleblower Definition Under Dodd-Frank

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By Jay-Anne B. Casuga

Internal whistleblowers who don’t report suspected securities violations to the SEC in a timely manner may not sue their publicly traded employers under a federal financial law sparked by the Great Recession.

The U.S. Supreme Court Feb. 21 agreed with Digital Realty Trust Inc. that the Dodd-Frank Wall Street Reform and Consumer Protection Act defines a whistleblower as an individual who reports alleged securities violations or fraud charges to the Securities and Exchange Commission.

The law doesn’t protect workers who report allegations only within their companies, the justices said, rejecting the SEC’s broader definition of a whistleblower.

The case is Digital Realty Trust, Inc. v. Somers, U.S., No. 16-1276, 2/21/18.

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