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Whistleblower Actions May Become More Difficult in the Financial Industry.

The U.S. Supreme Court recently decided to review whether a whistleblower in the financial industry could file suit against an employer for discrimination or retaliation even though he had not first reported the employer to the Securities and Exchange Commission (“SEC”) as seemingly required by the Dodd-Frank Act. The Fifth Circuit Court of Appeals says that reporting to the SEC is a prerequisite to an action under Dodd-Frank. The Second and Ninth Circuit says that it isn’t.

Some basics:

While there are a number of different statutes designed to protect whistleblowers, in the financial / business world there are two primary statutes: the Sarbanes-Oxley Act and the Dodd-Frank Act.

The two laws are very similar as regards whistleblowing but there are differences which make filing suit under the Dodd-Frank Act the preferred course of action. For one, Sarbanes-Oxley requires that an administrative complaint must be filed within 180 days (a very small window of opportunity) or the claim will be lost. Dodd-Frank allows between 3 and 10 years to bring an action, but the wording of Dodd-Frank suggests that you cannot file suit under the Dodd-Frank Act if you haven’t first reported the employer to the SEC.

Here’s the situation:.

An employee discovers that several co-workers are falsifying financial information in order to increase their commissions. He immediately reports what he knows to his supervisor. A week later, his employment is terminated. Under a strict reading of Dodd-Frank, the employee cannot file a whistleblower suit because he hadn’t reported the employer to the SEC before he was fired.
Until this issue is resolved by the Supreme Court, remember that time is of the essence (180 days under Sarbanes-Oxley). If you think that you have been retaliated against for whistleblowing, seek qualified legal assistance from a law firm that knows the ins and outs of the law.

At Murtagh, Hobaugh & Cech, we have dealt with these issues in representing employees for years. We know what you need, what you are entitled to, and how to get it.

Murtagh, Hobaugh & Cech: “The help you need…”