A recent ruling by the Fifth Circuit has set up a potential circuit split on an issue that could dramatically change how the whistleblower bar does business. The court ruled that anti-retaliation provisions in Dodd-Frank only protect tipsters who disclose alleged fraud to the SEC.
Litigation Partner Jeremy Sternberg said although the ruling sharply rejected the agency's interpretation of Dodd-Frank, the decision could benefit the SEC in the long run. It may encourage whistleblowers to report their concerns directly to the SEC and provoke more tips about alleged fraud.
“As a practical matter, the decision appears to give with one hand to the SEC, and take away with the other,” Mr. Sternberg said.
READ: Whistleblower Attys On Edge As Dodd-Frank Split Deepens (subscription may be required)
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