Does the Digital Realty Decision Represent a Sea Change for Whistleblowers or Merely More of the Same?
The Hedge Fund Law Report has published an article by Friedman Kaplan partner Anne Beaumont and associate Alexander Levi regarding the recent U.S. Supreme Court decision in Digital Realty Trust, Inc. v. Somers, which addresses the scope of whistleblower anti-retaliation protection under Dodd-Frank. 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 alone does not confer protection under the statute. Many commentators have predicted alarming consequences from the decision, but there are reasons to believe that they are unlikely to materialize.
In the article, Ms. Beaumont and Mr. Levi review the statutory framework of whistleblower protections, the lower court decisions in Digital Realty, the Supreme Court’s decision, and its implications for private fund managers.