First Dodd-Frank Whistleblower Case May Impact Internal Investigations


[Update:  The case against TradingScreen was ultimately dismissed.  Interested readers should refer to subsequent case history.] Egan v. TradingScreen Inc. (S.D.N.Y. May 4, 2011) is the first case dealing with the Dodd-Frank Act’s whistleblower provisions that we are aware of.  Plaintiff Patrick Egan was employed by TradingScreen.  It seems to fall... Read More

Topics: Employment, Litigation, Public Companies and Securities

SEC “Dodd-Franks” Gupta


Section 929P of the Dodd-Frank Act amended, among other things, Section 21B(a) of the Securities Exchange Act to permit the SEC to impose civil monetary penalties in administrative cease-and-desist proceedings before an administrative law judge.  The provision eliminates the need for the SEC to seek a court order imposing civil... Read More

Topics: Litigation

SEC Settles Clawback Claim With Beazer Homes CEO


The SEC has announced a settlement with the chief executive officer of an Atlanta-based homebuilder to recover several million dollars in bonus compensation and stock profits that he received while the company was committing accounting fraud. According to the SEC’s complaint filed in federal court in Atlanta, CEO Ian J.... Read More

Topics: Employment, Executive Compensation, Litigation, Public Companies and Securities

Court Holds Dodd-Frank Ban on Arbitration of Whistleblower Claims is Retroactive


In Pezza v. Investors Capital Corp., (D. Mass. Civ. Ac. No. 10-10113-DPW), the plaintiff claimed he was wrongfully retaliated against, in violation of the Sarbanes-Oxley Act, after having raised concerns regarding misconduct by the defendants in connection with securities transactions.  The defendants raised the obligation to arbitrate as an affirmative... Read More

Topics: Employment, Litigation, Uncategorized

First Public Company Receives Benefit of SEC Cooperation Policy—Implications for Whistleblower Claims


The first public company received credit for its cooperation as a result of the SEC’s policy with respect to cooperation in investigations and enforcement actions announced in January 2010.  The public company, Carter’s, Inc., entered into a non-prosecution agreement.  The SEC charged a former Executive Vice President of Carter’s Inc.... Read More

Topics: Banking, Broker-Dealer, Employment, Insurance, Litigation, Public Companies and Securities

SEC Seeks Public Comment Regarding Private Rights of Action for Transnational Securities Fraud


In Morrison v. National Australia Bank, the Supreme Court limited the extraterritorial scope of  Section 10(b) of the Securities and Exchange Act of 1934 by holding that the antifraud provision only applies to domestically listed security transactions.  130 S. Ct. 2869, 2884 (2010). Notwithstanding this decision, the Securities and Exchange... Read More

Topics: Litigation, Public Companies and Securities