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SCOTUS steps in with key Dodd-Frank whistleblowing ruling

Financial regulators from the U.S. Securities and Exchange Commission have long insisted that the impressive protections extended whistleblowers under the seminal Dodd-Frank legislation be liberally construed. That is, they are stated to apply to individuals who bring fraud-related charges to both the SEC and via other outlets, such as to company managers, various agencies and members of Congress.

That view is, well, wrong, and it was decidedly trounced just last week by the U.S. Supreme Court. That tribunal ruled unanimously that Dodd-Frank's language is eminently clear on reporting matters, yielding the "unequivocal answer" that Dodd-Frank whistleblower safeguards apply only in cases where fraud is reported directly to the SEC.

Some commentators might reasonably express surprise that it actually took a high-court pronouncement to settle the matter. Indeed, the statutory language is plain on its face, and we have long noted it on our consumer-protection website at Shepherd, Finkelman, Miller & Shah. We stress therein for readers in Connecticut and elsewhere that a whistleblower must communicate "with the SEC's whistleblower's office … or online through the SEC's website."

Following the mandated process is critically important. Dodd-Frank protections are greater than those afforded under prior legislation, and an individual needs to comply with them to be fully eligible for any resulting benefits that accrue.

Many important questions can arise for any individual who contemplates assuming the role of a Dodd-Frank whistleblower. Those range from eligibility concerns and timing requirements to protection against retaliation and financial rewards for successful fraud recoveries. An experienced securities law attorney can provide candid counsel and diligent whistleblower representation.

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