The SEC continues to press its view that a plaintiff need not provide information to the SEC in order to bring a claim under the Dodd-Frank Act’s anti-retaliation provisions. In our April 1, 2014, newsletter, we discussed the SEC’s amicus curiae brief in Liu v. Siemens, in which the SEC argued its position to the Second Circuit. (See April 1, 2014, newsletter, The SEC Tells the Second Circuit that Dodd-Frank Whistleblowers Need Not File a Whistleblower Report With the SEC ). In Liu, the Second Court declined to reach the issue, but rather affirmed dismissal of the complaint because it concluded that the anti-retaliation provisions did not have extraterritorial effect. (See October 3, 2014, newsletter,Second Circuit Holds That Dodd-Frank Anti-Retaliation Provisions Do Not Apply Extraterritorially).
On December 12, 2014, the SEC pressed the issue again in another amicus brief, this time to the Third Circuit in Safarian v. American DG Energy Inc., No. 14-2734 (3d Cir. 2014). Interestingly, the district court had not reached the SEC reporting issue because, even if reporting to the SEC was not required, the court concluded that the plaintiff’s internal reporting was not protected by SOX. As it did in the Liu amicus, the SEC argued that Dodd-Frank whistleblower provisions “do not unambiguously demonstrate congressional intent to restrict anti-retaliation protections to only those individuals who provide information to the SEC.” Because, in the SEC’s view, the statutory scheme is ambiguous, the SEC asserts that its rule that an individual is a whistleblower if he or she makes internal disclosures that are protected under SOX, is entitled to deference. While the Third Circuit may not need to address the issue raised in the SEC amicus, if it chooses to do so, a decision in the plaintiff’s favor would establish a Circuit split that would certainly invite the United States Supreme Court to consider the issue.