06 May 2018

US Corporate Law News: Federal court rules that testimony to FINRA falls outside of Dodd-Frank protection


Flora Tsui
Associate | US

On April 19, 2018, a New Jersey federal district court ruled that even though the SEC oversees testimony to FINRA, such testimony does not constitute protected activity for the purposes of establishing a whistleblower claim under the Dodd-Frank Act of 2010. Prior to an employee's termination from UBS, the employee had testified before FINRA alleging UBS management's unlawful activities. The terminated employee then brought anti-retaliation claims under Dodd-Frank and the Florida Whistleblower Act, arguing that due to the SEC's oversight of FINRA, his disclosures to FINRA were equivalent to disclosures to the SEC. The federal court disagreed, reiterating the Dodd-Frank program's objective to motivate people to report specifically to the SEC. The recent decision highlights that potential whistleblower plaintiffs must report misconduct to the SEC in order to be considered whistleblowers for purposes of receiving Dodd-Frank protection. For more information on the Price v. UBS Fin. Servs. case, see https://scholar.google.com/scholar_case?case=850719733825740766&hl=en&as_sdt=6&as_vis=1&oi=scholarr.

Flora Tsui Associate | New York