Are Internal Complaints Protected by the Dodd-Frank Act?

When you have information about a securities violation that should be reported to the Securities and Exchange Commission (SEC) and you first report it to your company’s internal compliance program, you should feel secure that you won’t be retaliated against for doing the right thing.

Sadly, far too many employers choose to ignore the regulations outlined in both the Dodd-Frank and Sarbanes-Oxley (SOX) Acts, which protect whistleblowers from retaliation for reporting investment fraud and other schemes to their company’s internal compliance programs and the SEC.

Dodd-Frank Protections

The Dodd-Frank Act provides protection for whistleblowers under three specific circumstances: the whistleblower who submits a tip to the SEC, any whistleblower who is involved in any way with an SEC investigation, and those who disclose information that falls under protections outlined in Dodd-Frank, SOX, and other jurisdictions of the SEC.

Many companies who have retaliated against employees who blew the whistle internally maintain that these whistleblowers are not protected by the Dodd-Frank Act because they didn’t go to the SEC.

However, one could argue that the SOX Act does suggest that whistleblower protections from retaliation apply to employees who don’t report to the SEC but make a report to a higher authority within their company, meaning internal whistleblowers should be protected.

The SEC itself does not require that whistleblowers report tips about securities violations to the SEC—as long as they report them internally to the appropriate corporate parties.

The Ruling

Unfortunately, the US Supreme Court recently issued a decision clarifying the retaliation provisions that were once up for interpretation. They hold that whistleblowers who do not report their information to the SEC will not be covered under Dodd-Frank’s retaliation protections.

Whistleblowers who report internally and not to the SEC will still be protected under SOX, and if a whistleblower reports a tip both internally and to the SEC, he or she will be protected from retaliation under both SOX and Dodd-Frank.

Contact an SEC Whistleblower Lawyer

If you’re concerned that you might face retaliation from your employer for reporting a tip internally and haven’t yet submitted your information to the SEC, get in touch with an experienced SEC whistleblower lawyer at Meissner Associates as soon as possible. We can help ensure that you are protected from retaliatory action.

Give our office a call at 1-866-764-3100 or fill out the secure contact form below to schedule your no-obligation tip evaluation.