The U.S. Supreme Court declined to review a former Morgan Stanly employee’s claims that he is entitled to whistleblower protections after reporting to the FBI instead of the SEC.
According to a Law360 report, John S. Verble (CRD# 3197928), the would-be whistleblower, attempted to attain whistleblower protection after he reported illegal activity to the FBI. Verble filed an action seeking the protection in a lower court, where the court ruled that the Dodd-Frank Act’s whistleblower protections only applied to those who report to the SEC.
The Sixth Circuit, according to the report, upheld the lower court decision and dismissed claims that Morgan Stanley fired Verble in retaliation for reporting the illicit activity. The Sixth Circuit did not even consider how to interpret the Dodd-Frank whistleblower protections, as it determined Verble’s allegations of working with the FBI were too vague to state a claim for relief.
In March 2017, the U.S. Supreme Court declined to hear Verble’s case.
According to the complaint Verble filed against Morgan Stanley, Verble alleges that a co-worker saw Verble getting into a vehicle with what looked to be federal agents. Verble was ultimately called into a meeting with management, according to the complaint, where Morgan Stanley management concluded that he was working with the FBI. Verble was later discharged.
According to Verble’s FINRA BrokerCheck report, Morgan Stanley (CRD# 149777) discharged Verble in 2013 for allegedly accepting funds from a third party outside of the firm’s compensation policy.
There is confusion over the Dodd-Franks anti-retaliation provision and who it applies to in circuit courts. The Dodd-Frank Act defines a “whistleblower” as someone who reports to the SEC, but some courts have found it to be ambiguous. The SEC has held that anyone who reports internally is entitled to the Dodd-Frank protections.
In March 2017, the Ninth Circuit found that the Dodd-Frank’s anti-retaliation provision expressly protected whistleblowers from retaliation, whether they report to the SEC or internally.
Restrictions on who the anti-retaliation provision applies to can have a chilling effect on the whistleblower protection laws. It is important that whistleblowers can come forward to authorities to report wrongdoing without fear of retaliation by their employing company.
Scott L. Silver, managing partner of the Silver Law Group, was an early proponent of the legislation and authored a primer on the SEC Whistleblower Program. Our legal team includes former defense attorneys and government prosecutors now working to protect whistleblowers.
Scott L. Silver and David R. Chase are committed to the protection of whistleblowers through the whistleblower claim process and can prosecute your whistleblower claims. If you have questions about your legal rights as a whistleblower, please contact Scott Silver of the Silver Law Group for a free consultation at firstname.lastname@example.org or toll free at (800) 975-4345.