On September 28, 2015, the U.S. Department of Labor Administrative Review Board (“ARB”) held that the recording of workplace conversations can be protected whistleblower activity under the Energy Reorganization Act of 1974 (“ERA”).  Franchini v. Argonne National Laboratory, ARB Case No. 13-081 (Sep. 28, 2015).

In a recent interview with Law360 (subscription required), Chris Ehrman, the Director of the U.S. Commodity Futures Trading Commission’s Whistleblower Office, predicted that the number and size of the CFTC’s whistleblower awards will increase in the near future. Ehrman also said that the agency will conduct “straight marketing” to ensure that potential whistleblowers are aware of the agency’s whistleblower bounty program.

The CFTC’s Whistleblower Program is similar to the SEC’s program in that whistleblowers who voluntarily provide the CFTC with original information about violations of the Commodity Exchange Act resulting in a $1 million or greater recovery are eligible to receive 10 to 30 percent of the monies collected. Ehrman acknowledged that the CFTC’s whistleblower program, which paid its first award in May 2014 and has received only 227 whistleblower tips in fiscal year 2014 versus the SEC’s 3,620, has gotten off to a slower start than the SEC’s program. Ehrman attributes the slow start to the fact that the CFTC, which is limited to regulating the commodities industry, has a “smaller footprint than the SEC.” Ehrman also noted that, unlike the SEC, the CFTC does not have the authority to enforce Dodd-Frank’s anti-retaliation provision.

SEC logoEarlier today, the SEC announced that it would pay an unidentified compliance officer a whistleblower bounty award of between $1.4 and $1.6 million.   This is the second award that the SEC has made to a whistleblower with internal audit or compliance responsibilities.  According to the SEC, the recipient of the bounty award “had a reasonable basis to believe that disclosure to the SEC was necessary to prevent imminent misconduct from causing substantial financial harm to the company or investors.”

2d Cir Court of AppealsThe Second Circuit Court of Appeals recently deferred to the SEC’s determination that a tipster who provided information to the Commission before July 21, 2010, the effective date of the Dodd-Frank Act, is not eligible to receive a whistleblower bounty payment.   Stryker v. SEC, Case No. 13-4404-ag (2d Cir. Mar. 11, 2015).

Guest Post from Proskauer’s Whistleblower Defense Blog.
Written By Steven J. Pearlman, Lloyd Chinn, Harris Mufson and Noa Baddish on November 12, 2014

The U.S. District Court for the Eastern District of Wisconsin in Verfuerth v. Orion Energy Systems, Inc., No. 14-cv-352 (E.D. Wis. Nov. 4, 2014) recently ruled that the Dodd-Frank whistleblower protection provision does not protect employees who only report alleged violations of the securities laws internally. In dismissing a former CEO’s whistleblower retaliation claim, the court followed the Fifth Circuit’s decision in Asadi v. F.E. Energy (USA), L.L.C., 720 F.3d 620 (5th Cir. 2013) and held that the text of the statute requires that a “whistleblower” report an alleged violation to the SEC to be covered by Dodd-Frank’s whistleblower protection provision.