Dodd-Frank Act

The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) was passed in 2010 in response to the financial crisis of 2008. It is an enormous piece of financial reform legislation. Among other things, the Dodd-Frank Act provides whistleblower protection to employees in New York. At Phillips & Associates, our New York City whistleblower attorneys may be able to represent you in connection with blowing the whistle on your employer, including pursuing any damages that you may be entitled to recover for retaliation.

Under Section 922 of the Dodd-Frank Act, the SEC is supposed to pay awards to eligible whistleblowers who, of their own volition, give the SEC original nonpublic information about a securities law violation that leads to a successful enforcement action that results in monetary sanctions of more than $1 million. Original information under Dodd-Frank is information obtained from the independent analysis or knowledge of the whistleblower that is not known to the SEC from another source. It cannot be exclusively derived from a judicial or administrative hearing or news media, unless the whistleblower is the source of the information.

The amount of the award is supposed to be 10-30% of the monetary sanctions that are collected in the Commission's action or a related action. The statute of limitations under which whistleblowers can bring claims against employers is 180 days after a violation is discovered.

The SEC whistleblower program is administered by the Office of the Whistleblower. However, it can be helpful to retain an attorney even when you are first trying to decide whether to report securities fraud or another violation.

Dodd-Frank also mandates a reward by the SEC to whistleblowers who voluntarily give original information about securities violations or bribes paid to foreign officials who violate the Foreign Corrupt Practices Act. There is a similar program for the Commodities Future Trading Commission, which provides rewards when whistleblowers make reports of violations when commodities are traded. There is some overlap with the Sarbanes-Oxley Act, but Dodd-Frank contains a longer statute of limitations, offers larger back pay awards, and provides the chance to sue in federal court. Protection applies when an employee reports consumer law violations to an employer or any local, state, or federal government authority or law enforcement agency.

It can be nerve-wracking to consider reporting your employer and threatening your livelihood, regardless of the incentives under the SEC and CFTC programs. Crucially, however, Dodd-Frank prohibits employers from retaliating against whistleblowers. Your employer is not supposed to retaliate against you for reporting violations of the laws that cover commodity and currency exchange, corporate and accounting fraud, or consumer finance. Retaliation can include a wide range of adverse behaviors taken by an employer in response to an employee's engagement in protected activities. It can include being fired, demoted, or even harassed.

Previously, there was some disagreement among courts about whether whistleblowers who report securities violations should be protected under Dodd-Frank. The SEC had interpreted the whistleblower protections more broadly to encompass internal complaints that were otherwise eligible. However, in 2018, the Supreme Court ruled that whistleblower protections only apply to people who report problems to the SEC, rather than people who simply file an internal report. The justices held that employees who only report problems to management but not the SEC will not qualify for Dodd-Frank protection against retaliation. However, if you simply report a problem to your management, you may still have protections against retaliation under the Sarbanes-Oxley Act.

People who are mistreated in the workplace because they reported a securities violation to the SEC should seek out knowledgeable legal help. If you are concerned about whistleblower protections under the Dodd-Frank Act in a New York City workplace, you should consult an experienced employment attorney. You can contact Phillips & Associates at (212) 248-7431 or through our online form for a free consultation. We handle employment litigation in the boroughs of the Bronx, Queens, Brooklyn, and Manhattan; the counties of Westchester, Nassau, and Suffolk; as well as New Jersey, Connecticut, and Pennsylvania.

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