The U.S. Supreme Court opinion in Digital Realty Trust, Inc. v. Somers
addresses the scope of the whistleblower anti-retaliation provision of the Dodd-Frank Act. In a unanimous decision, the Court held that an individual can bring a claim under Dodd-Frank’s anti-retaliation provision only if he or she has made a formal report to the SEC; internal reporting does not confer protection under the statute. Many commentators have predicted alarming consequences from the decision, but there are reasons to believe that many of those are unlikely to materialize. In a guest article, Anne E. Beaumont and Alexander D. Levi, partner and associate, respectively, at Friedman Kaplan Seiler & Adelman, review the statutory framework of whistleblower protections, lower court decisions in Digital Realty
, the Supreme Court’s decision in Digital Realty
and the ruling’s implications for private fund managers. For a discussion of whistleblower protections in another jurisdiction, see “CIMA Regulator Discusses Key Issues for Advisers That Manage Cayman Funds: AIFMD Marketing Passport, Whistleblowers and Administrative Fines Regime (Part Two of Two)
” (Sep. 21, 2017). For additional commentary from Beaumont, see “Recent New York Court of Appeals Decision Eases Path for Investor Lawsuits Against Cayman Funds, but Certain Hurdles Remain
” (Dec. 7, 2017); and “How Hedge Fund Managers Can Balance Protecting Confidential Information Against Complying With Whistleblower Laws
” (Aug. 25, 2016).