What Will Happen to Whistleblower Protections if Sarbanes Oxley is Repealed?
One of the most pressing questions being asked about the Trump administration’s promised revisions to the Dodd-Frank Act is whether the change could also have an impact on Sarbanes Oxley’s whistleblower retaliation protections. Though there is a definite possibility that Sarbanes Oxley could see some changes, it is unlikely that it will eliminate the impact of whistleblower claims – in fact, it may even mean that more are filed.
Though one of the proposed changes would eliminate the ability of “culpable” whistleblowers to receive whistleblower awards, the changes proposed under the Financial Choice Act would not eliminate the protections offered to whistleblowers against retaliation, and would likely not change the fundamentals of the whistleblower claims rules beyond that. Insiders are also finding themselves wondering whether the rush to deregulate industry won’t end up inviting more misconduct, and therefore providing an expanded role for whistleblowers as they expose more and more fraud.
Even if this is not the case, and there isn’t reason for whistleblower claims to be filed under the auspices of Sarbanes Oxley, the majority of whistleblower claims have not been filed under the act since Dodd-Frank was enacted in 2010. The number of whistleblower claims filed under Sarbanes Oxley dropped by 10% immediately after Dodd-Frank passed, and then another 25% in 2011. At the same time, the number of claims filed under all other statutes increased. That is likely to continue, as the existence of specialized whistleblower laws and provisions has eliminated the need for the more general laws exercised under Sarbanes Oxley.
If Dodd-Frank ends up being eliminated, both the courts and the language of Sarbanes Oxley will likely continue to provide whistleblowers with the protection that Sarbanes Oxley originally intended. And experts believe that whistleblowers have less interest in Sarbanes Oxley’s fines than they do in getting reinstated to their jobs and receiving back pay, which courts are still likely to provide. One way or another, the vast majority of the successful whistleblower claims between 2006 and 2016 have been litigated in court rather than under Sarbanes Oxley.
If you are aware of wrongdoing by your employer or a company for whom you have insider knowledge and are considering filing a whistleblower claim, contact the experienced Philadelphia attorneys at Bochetto & Lentz today. We have a successful record in these complex cases.