Litigation & Dispute Resolution

Recent Changes to Whistleblower Protections under Dodd-Frank

Recent cases have triggered a growing discussion about the whistleblower protections under the Dodd-Frank Act. Most believe that the regulations under Dodd-Frank are here to stay (at least another four years) now that President Obama has been reelected. With new regulations comes new judicial interpretations of the regulations. These judicial interpretations often broaden or narrow the scope of the regulation and can have profound impacts depending on the nature of the interpretation. In today’s post, we’ve highlighted the general characteristics of the two major whistleblower protections under Dodd-Frank and how recent cases have expanded these protections.

The Bounty Program Under Dodd-Frank, whistleblower’s can receive cash for sharing information with the SEC or Commodity Futures Trading Commission concerning any misconduct that falls under...

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Corporate Finance & Securities

SEC Names New General Counsel

Yesterday the SEC announced that Geoffrey Aronow would be the next general counsel of the SEC. Aronow, an attorney at the Washington D.C. offices of Bingham McCutchen, will be returning to the public sector once again, after working for the Commodity Futures Trading Commission in the late 1990’s.

The SEC Chairwoman Mary Schapiro resigned last month, and a number of other officers including Mark Cahn, then serving as general counsel, left with her. Elisse Walter, already a member of the Commission, was named as the interim Chairwoman in the wake of Ms. Schapiro’s departure. But the Commission, which usually has five members, is left with only four, and is currently deadlocked on a number of key issues.

Ms. Schapiro left at a time...

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Business Startup

iVLG News Roundup Week 43: Whistleblower Wins, Google Venture, Dodd Frank, etc.

Regional News

Whistleblower Receives Multi-Million Dollar Settlement The former CFO of Seattle-based biopharmaceutical company Omeros Corp., Richard Klein, received nearly $4 million in settlement to resolve a wrongful termination and whistleblower lawsuit. According to Klein’s attorney, the former CFO alleged that Omeros falsified timekeeping records on a National Institute of Health research grant. Klein alerted Omeros’ audit committee and was subsequently fired from Omeros.

Omeros denies any wrongdoing, and stated its reason for settling as, “given a ruling by the court that deprived Omeros of evidence that Omeros would have offered at trial, the inherent uncertainty in a jury trial that could have resulted in an award to Mr. Klein that significantly exceeded the limits of Omeros’ insurance policy…the overall costs of a...

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Corporate Finance & Securities

SEC Hands Out Hefty Reward to Whistle-Blower

The Securities and Exchange Commission reported Tuesday that it handed out the first reward to a whistle-blower who helped federal securities regulators shut down an investment fraud. Under the SEC’s new whistle-blower reward program, the commission cannot disclose any information about the firm involved, including the information that the whistle-blower provided, but it did disclose that the case has led to more than $1 million in sanctions.

The new reward program was created as a part of the Dodd-Frank overhaul of the financial industry. The $50,000 payout—which is roughly 30 percent of the amount collected in the enforcement action—to the whistle-blower is the maximum reward under the new program. However, as the sanctions increase and more money is collected, the payout...

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Corporate Finance & Securities

Say-On-Pay: An Overview, and An Update

An Overview The Dodd-Frank Wall Street Reform and Consumer Protection Act signed into law in August of 2010 included a requirement that publicly traded companies provide shareholders with a non-binding vote to approve executive compensation plans. These non-binding votes are commonly referred to as “say-on-pay” measures.

In accordance with Dodd-Frank, the SEC’s implementing rule, effective January 5, 2011, requires large corporations to provide their shareholders with non-binding resolutions to approve the compensation for named executive officers at least once every three years. Because the resolutions are non-binding, a vote rejecting executive compensation does not have any necessary consequence. However, failed say-on-pay measures get the attention of corporate boards, and recent studies demonstrate that the non-binding resolutions have practical consequences.

An Update – Causes...

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