In its recent decision in Digital Realty Trust, Inc. v. Somers, the U.S. Supreme Court narrowed the definition of employees classified as “whistleblowers” and thus protected by anti-retaliation measures of the Dodd-Frank Act. The ruling places limitations on the Securities and Exchange Commission’s whistleblower program, requiring reporting to the Commission before receiving its protections and incentives.
RK&O partner Steven Paradise noted that this is likely due to the public policy of promoting internal reporting, investigation, and remediation, and thereby potentially avoiding or minimizing the need for the SEC to investigate every instance of suspected securities law violations.
"Companies advocated for incentivizing employees to first report suspected violations internally, so as to provide companies an opportunity to investigate first to determine whether—and to what extent—additional measures, including self-reporting to the SEC, are required," he said.
"Court ruling limits scope of SEC whistleblower reporting" - Compliance Week (subscription required)