No Retaliation Protection For Overseas Whistleblowers

Two recent district court decisions may curtail SEC whistleblower reports that emanate from sources outside the United States. Both decisions, one in Texas and one in the Southern District of New York, held that extraterritorial sources are not protected by Dodd-Frank anti-retaliation provisions. These rulings are likely to reduce the frequency of extraterritorial reports, which during the first fiscal year of the SEC program amounted to more than ten percent of all reports. However, the writer notes, that effect could be blunted by the SEC promise of anonymity, of the sort dramatically evidenced in a recent record-setting $14 million whistleblower award.