The Supreme Court limits whistleblower protections under Dodd-Frank

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WHEN Paul Somers realised that Digital Realty Trust, the real-estate investment company where he was vice-president, was playing fast and loose with securities rules, including hiding $7m in cost overruns, he alerted senior management. Shortly afterwards he was sacked from his $200,000-a-year job. In 2014, Mr Somers sued the company, arguing that he should have been immune from retaliation by whistleblower protections in the Dodd-Frank Act, a 2010 package of Wall Street reforms passed in the wake of the 2008 financial crisis. The company countered that Dodd-Frank defines “whistleblower” as someone reporting misdeeds to the Securities and Exchange Commission (SEC), not to internal compliance departments. The Ninth Circuit Court of Appeals saw the law differently, but on February 21st, the Supreme Court unanimously sided with the company in Digital Realty Trust v Somers. If Mr Somers wanted his good deed to go unpunished, the nine justices agreed, he would have had…Continue reading

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