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SEC Backs Protections in Place for Internal Whistleblowers

Some new guidance provided by the Securities and Exchange Commission (SEC) this summer gave some additional reinforcement to the agency’s stance that whistleblowers who report misconduct through their company’s internal channels rather than immediately going to the SEC are still protected by the Dodd-Frank Act’s retaliation provisions.

However, there is still some debate over the matter, as a court ruling last year and another pending court ruling conflict with this stance, which some blame on ambiguous wording in the Dodd-Frank Act.

At the time Dodd-Frank was passed, the whistleblower provisions included in the legislation said employees who reported misconduct to the SEC would be protected against employer retaliation. The SEC has always maintained this protection is available for whistleblowers who report through internal channels as well, but because this was not made clear in the legislation, companies have attempted to get around bearing liability for retaliation by claiming an internal report exception.

This is a debate that will likely go in front of the Supreme Court at some point, especially considering the conflicting rulings that have been handed down in a couple other cases. But if the SEC has its way, all whistleblowers, not just those who report to the SEC first, will receive the same level of protections against wrongful termination and other forms of retaliation from employers.

To learn more about the protections afforded to whistleblowers by the federal government and the benefits of coming forward and reporting misconduct, work with the skilled team of Dallas attorneys, led by Steve Kardell, at Whistleblower Law for Managers.

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