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As the U.S. Supreme Court considers whether corporate whistleblowers are shielded form retaliation if they only report alleged misconduct internally rather than go straight to the Securities and Exchange Commission (SEC), partner Jordan A. Thomas discussed the potential outcomes in Digital Realty Trust Inc. v. Somers. The case hinges on the SEC’s whistleblower protection rules required by the 2010 Dodd-Frank Wall Street reform law, which prohibit corporate employers from retaliating in any way against whistleblowers who try to report allegations of securities law violations.
“I think both corporate whistleblowers and corporations should hope that the Supreme Court finds that internal reporting is sufficient to have the anti-retaliation protections because if not, sophisticated corporate whistleblowers will bypass internal reporting systems and report directly to the SEC,” he said.
If the Supreme Court ultimately sides with the company, then it would force corporate whistleblowers to report wrongdoing to the SEC in order to be protected from retaliation.
Such a result could deter people from reporting misconduct internally first, according to Thomas.