Review of the SEC Whistleblower Program: At the Crossroads of Securities Law and Whistleblower Protection
Latest from Proskauer Whistleblower Defense
SEC Awards Four Whistleblowers More Than $31 Million
On May 17, 2021, the SEC announced payment of more than $31 million to four whistleblowers who provided the SEC with information that resulted in the return of tens of millions of dollars to harmed investors. The largest of the awards, totaling almost $27 million, was awarded to two joint whistleblowers who provided the SEC with new information and assisted with an existing investigation. The second order included awards of approximately $3.75 million and $750,000…
M.D. Pennsylvania Grants Summary Judgment on SOX Retaliation Claim
On April 12, 2021, the U.S. District Court for the Middle District of Pennsylvania granted a defendant-employer’s motion for summary judgment on a SOX whistleblower retaliation claim, holding that the company demonstrated that it would have terminated Plaintiff’s employment even in the absence of any alleged protected activity as part of a broad reduction-in-force (RIF). Wickens v. Rite Aid Hdqtrs. Corp., No. 19-cv-02021.
Background
Plaintiff, a former in-house attorney at the company, allegedly learned…
SEC Awards $22 Million to Two Whistleblowers
On May 10, 2021, the SEC’s Office of the Whistleblower announced multi-million dollar awards to two whistleblowers who provided the SEC with information that assisted the agency in bringing a successful enforcement action against a financial services firm. (The order granting the awards can be accessed here.) The larger of the two awards, $18 million, was awarded to the whistleblower who was the initial source of the information that prompted the SEC’s investigation. The…
Pennsylvania District Court Grants Employer Summary Judgment on SOX Claim
On March 29, 2021, the U.S. District Court for the Eastern District of Pennsylvania granted a defendant-employer’s motion for summary judgment on a SOX whistleblower retaliation claim, holding that the plaintiff lacked an objectively or subjectively reasonable belief that the company violated any law enumerated in Section 806 of SOX. Ngai v. Urban Outfitters, Inc., No. 19-cv-1480.
Background
Plaintiff, a Director of Sourcing and Technical Design, was responsible for ensuring that overseas factories properly…
6th Circuit: FCA Whistleblower Protections Extend to Post-Employment Retaliation
On March 31, 2021, the Sixth Circuit addressed an issue of first impression in the circuit, holding that the False Claims Act’s (“FCA”) whistleblower protection provisions protect former employees from post-employment retaliation. United States, ex rel. Felten v. William Beaumont Hospital, No. 20-1002.
Background
Plaintiff was employed as a doctor at a Michigan hospital. He filed a qui tam action against the hospital alleging that it was paying kickbacks to various physicians and…
SEC Awards Joint Whistleblowers More Than $50 Million
On April 15, 2021, the SEC announced payment of more than $50 million to joint whistleblowers who provided the SEC with information that resulted in the return of tens of millions of dollars to harmed investors.
Jane Norberg, Chief of the SEC’s Office of the Whistleblower, noted that “this award is the second largest in the history of the SEC’s whistleblower program” (following only the record-breaking $114 million award announced in October 2020), and reflects…
SEC Whistleblower Chief Jane Norberg to Leave, Agency Announces
The SEC announced on April 8, 2021 the departure of Jane Norberg, Chief of the SEC’s Office of the Whistleblower. Ms. Norberg had been with the Office nearly since its inception in 2012, serving as its first Deputy Chief and then as Chief following the departure of Sean McKessy in 2016.
The SEC’s press release highlights a number of milestones achieved during Ms. Norberg’s tenure as Chief of the Office, including:
The issuance of awards…
7th Circuit Affirms Denial of Equitable Tolling of Statute of Limitations Under SOX
On March 22, 2021, the Seventh Circuit affirmed a decision by the ARB dismissing a whistleblower retaliation complaint under SOX for failure to file within the 180-day statutory deadline. Xanthopoulos v. U.S. Department of Labor, No. 20-2604. The court rejected the plaintiff’s equitable tolling arguments.
Background
Plaintiff was an employee of an investment company, and his employment was terminated on October 3, 2017. Prior to and after his discharge, Plaintiff filed several reports on…
ARB Affirms Dismissal of SOX Whistleblower Claim for Lack of Protected Activity
On December 17, 2020, the Administrative Review Board (“ARB”) of the U.S. Department of Labor affirmed the dismissal of a former employee’s whistleblower retaliation claim under Section 806 of SOX. The ARB concluded that the Complainant did not engage in protected activity, noting that his complaints regarding a lack of what he characterized as “internal controls” were inadequate. The ARB also concluded that the Respondent showed it would have terminated Complainant’s employment even in the…