One More Thing about Liu v. Siemens, the Foreign Whistleblower Case

by Brooks Pierce
Contact

Last week I wrote about the Second Circuit’s recent decision in Liu v. Siemens AG, in which the court held that the Dodd-Frank Act’s anti-retaliation provisions do not apply to whistleblowers overseas.  As I think about it, one more aspect of that opinion is probably worth mentioning.

One of the arguments the whistleblower’s lawyers made on his behalf was that because the Dodd-Frank whistleblower bounty provisions have extraterritorial application, the anti-retaliation provisions should as well.  The court was unmoved, and appeared not to care very much what the SEC thought about it.  Among other things, it said,

Given the strong presumption that statutes are limited to domestic application in the absence of clear expression of congressional intent to the contrary, it is far from clear that an agency’s assertion that a statute has extraterritorial effect, unmoored from any plausible statutory basis for rebutting the presumption against extraterritoriality, should be given deference.

Because the whistleblower was going to lose on the anti-retaliation question, the court didn’t have to resolve this one.  It assumed for the sake of argument that the bounty provisions would apply overseas.  But if they didn’t, it would be a pretty serious shot to the SEC’s whistleblower program.  Not fatal.  But it would be a tough day at the office for SEC Whistleblower Chief Sean McKessy and FCPA Unit Chief Kara Brockmeyer, who are both looking to foreign whistleblowers to supplement the tips coming from domestic sources.

To me, the interesting thing about this is that there may not be many natural opportunities for this question to be resolved by a court.  If a foreign whistleblower makes a tip to the SEC and applies for an award, the whistleblower herself will obviously want the award to be paid and would argue for extraterritorial application if necessary.  The SEC, whose whistleblower program would have to be called a success by many measures but is still in the single digits in terms of awards granted, probably also will want to pay the award to incentivize others to step forward.  The SEC certainly wouldn’t want to deny an award on the basis of the whistleblower’s location.

Given the SEC’s aggressive protection of whistleblowers’ confidentiality, the people or entities who have been exposed may not even know it was a whistleblower who started or advanced the case.  If they did know it was a whistleblower, and who it was, it’s hard for me to see how they would have standing to challenge an award.

But if two whistleblowers, one domestic and one abroad, started to fight over the same award, that’s when we might have a vehicle to answer this question.  The domestic whistleblower would surely argue that the foreign one had no legal basis to collect.  All of this sort of happened in the Anshoo Sethi case, just with two domestic whistleblowers.  In trying to protect its larger program, I suspect the SEC would submit an amicus brief on the side of the foreign whistleblower.  Anyway, that’s how it would probably happen.  But it could take a long time to get there.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Brooks Pierce | Attorney Advertising

Written by:

Brooks Pierce
Contact
more
less

Brooks Pierce on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.