Berman v. Neo@Ogilvy, LLC

Section 21F of the Securities Exchange Act of 1934, which was added by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), required the Securities and Exchange Commission (SEC) to pay whistleblowers who reported securities violations that ended up in successful SEC enforcement actions. Section 21F defined whistleblower as any person who gave information to the SEC relating to a violation of securities laws. A subsection of § 21F prohibiting retaliation referred to and included the protections of the Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley). Sarbanes-Oxley, in turn, defined whistleblower as one who reported information relating to a violation of the securities laws internally and not to the SEC. The remedies for retaliation were different under Dodd-Frank and Sarbanes-Oxley. The SEC adopted a regulation attempting to fix this conflict by stating affirmatively that an individual was entitled to Dodd-Frank retaliation remedies even if the individual reported only internally and not to the SEC. Daniel Berman (plaintiff) reported internally at Neo@Ogilvy, LLC (defendant) that he believed the company was violating securities laws. Berman filed suit, alleging that Neo@Ogilvy retaliated against him for this report. Berman sought whistleblower compensation under Dodd-Frank. The trial court ruled in Neo@Ogilvy’s favor on the remedies issue, finding that Berman was not entitled to Dodd-Frank remedies because he did not report the suspected violation to the SEC. Berman appealed.