Amicus Curiae Brief — Digital Realty Trust, Inc. v. Somers, 138 S. Ct. 43 (2017) (No. 16-1276)

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— FILED

No. 16-1276 SUPREME cote DiS" |

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In the Supreme Court of the United States

DIGITAL REALTY TRUST, INC., PETITIONER

Uv,

PAUL SOMERS

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BRIEF FOR THE UNITED STATES AS AMICUS CURIAE

SUPPORTING RESPONDENT

ROBERT B, STEBBINS NOEL J. FRANCISCO

Geueral Counsel Solicitor General

MICHAEL A. CONLEY Counsel of Record

Solicitor MALCOLM L. STEWART

sp ay Counsel Omean G. MICHEL

aaiat uusel J ; ‘ HE

STEPHEN Gc. YooER a 3 Assistant to the Solicitor

or itigat Ouns .

, Depurtment of Justice

==> MISHRA Wank . ata | .C. 20530-0001

7 ™ ann Exchange (08) 51 L- ae 'U820}. JOU

Washington, D.C. 20549

QUESTION PRESENTED

The Dodd-Frank Wall Street Reform and Consumer

Protection Act, Pub. L. No. 111-203, 124 Stat. 1376, pro-

hibits emplover retaliation against whistleblowers who

make specified disclosures. 15 U.S.C. 78u-6(h)(1). ‘The

question presented is as follows:

Whether that prohibition encompasses retaliation

against individuals who report violations of the securi-

ties laws to company management but not to the Secu-

rities and Exchange Commission.

(T)

TABLE OF CONTENTS

Page

Interest of the United Statess............c....ccccssesnsssseseccseseenennereeneens 1

Statutory and regulatory provisions involved ..............ssses0e 2

Beeadaana8nt .ccecerse-a-crecsrvererecesrseresononrsseneorsroorresnessece seeseensererceceeeser sees 2

Summary Of argument ........csereseeesersssenensersnansnnenceneacenesneneeneeeees 10

ment:

The prohibition on employer retaliation against

whistleblowers in 15 U.S.C. 78u-6(h)(1) is not limited

to whistleblowers who report to the Commission .............. 14

A. The statutory text and structure indicate that the

anti-retaliation provisions use the term

“whistleblower” in its ordinary Sense ...................0006. 14

B. The statutory background and purpose confirm

that the anti-retaliation provisions use the term

“whistleblower” in its ordinary SeNSe ....................00000 27

C. The Commission’s reasonable interpretation of

Section 78u-6(h)(1) warrants judicial deference .......... 32

IED... oiiincnieencimmnncindiaeepminienmmaiaminsidiintenasiveiensitins 36

Appendix -- Statutory and regulatory provisions................ la

TABLE OF AUTHORITIES

Cases:

Asadi v. G.E. Energy (USA), L.L.C., 720 F.3d 620

i i iiiiehicisincternitien se neniieesisilccantianaitaniniitenpininnatinicenten 10

Berman v. Neo@Ogilvy LLC, 801 F.3d 145

i I tite coeiiicnetshasinaeseniiesnianicasnqeninatenceieniiie passim

Bussing v. COR Clearing, LLC, 20 F. Supp. 3d 719

CR i: BED ceentcinintsnensecssnuninnpenntinsuiiomnannesnenin 24, 27, 28, 32

Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837 (1984).......... 32

Cuozzo Speed Techs., LLC v. Lee, 136 8. Ct. 2131

TEITEII iiccsraruntessanasesethennniess-cebceuinbetnncictenimiasinatteetnaninaereueensaniiees 32

(III)

Cases—Continued: Page

Department of Homeland Sec. v. MacLean,

I aetna teen 16

Environmental Def. v. Duke Energy Corp.,

I iaiesiccccntensccncintncciianbiniinennsenes 17, 18, 27, 33

FDA v. Brown & Williamson Tobacco Corp.,

IS i ei inl cerriceaihnadiptismindammiennentans 19

Franklin Cal. Tax-Free Trust v. Puerto Rico,

805 F.3d 322 (1st Cir. 2015), aff'd, 1386 S. Ct. 1938

(a iceehe ineari tidetintcine dei chasieniaeipainaiantieieiaitiiisienieante 18

Herman & MacLean v. Huddleston, 459 U.S. 375

a iiiincnsemmnenibens 29

Jerman v. Carlisle, McNellie, Rint, Kramer &

Ulrich, L.P_A., 558 U.S. GTB (ZO10).............0.0ceccrccesssesseess 35

Jones v. SouthPeak Interactive Corp., 777 F.3d 658

TN aie ha teeteeeibiiicieeepabenmancidanaieiieneenioene 31

Kasten v. Saint-Gobain Performance Plastics Corp.,

es SEED cnictintnnmeeneiistersiiiiesianesiusiniiccnmenemncttaiininn 24, 29, 33

Khazin v. TD Ameritrade Holding Corp., 773 F.3d

I I iccinccrisesiniiniaibictdeiintisedanebiaenichaitiatiishinateaniansinetsaneis 31

LaManque v. Massachusetts Dep't of Emp &

Training, 3 F. Supp. 2d 83 (D. Mass, 1998) ...............000 15

Lamie v. United States Tr., 540 U.S. 526 (2004)... 27

Lawson v. FMR LLC, 134S. Ct.

a ciecsussscihiastnsniabibesnieiniesniniintansenenedionneiinenentcn 3, 22, 28

Lawson v. Suwannee Fruit & S.S. Co., 336 U.S. 198

RERSRRu Reed OE etre Recreate ee ove cee amano ences 17, 18, 19, 26

Lewis v. Clarke, 137 S. Ct. 1285 (2017).........cccccccreseesseeeeeees 35

Long Island Care at Home, Ltd. v. Coke, 551 U.S.

Se iisiresicieeicriineiieianisiininatinintataiasininpiainiiisiteniaiaimnenemnanion 35

Loughrin v. United States, 134 S. Ct. 2384 (2014)............. 16

McLane Co. v. EEOC, 137 S. Ct. 1159 (2017) .......-ccecccceeves 35

North Carolina State Bd. of Dental Examiners v.

FTC, 135 S. Ct. 1101 (2016)..........cccccccrccorsesssvreesesseessrseenss 29

Cases—Continued: Page

Philko Aviation, Inc. v. Shacket, 462 U.S.

Es SCR ERSESP aR ERSPe escnrennier sees See 17, 18, 30

Republican Party of Minn. v. White, 536 U.S. 765

LAEGER AIEEE Ween eon ee eva Een noe OR 29

Robinson v. Shell Oil Co., 519 U.S.

cease celeeticiaannienceiabiaielin 18, 20, 29, 33

United States v. Cleveland Indians Baseball Co.,

SC EE ictscntsdcdsibsinnssistilienssiiaiacneianiiciumeabiamuane 18, 26, 33

United States v. Mead Corp., 533 U.S. 218 (2001) ............. 33

United States v. Public Utilities Comm'n of Cal.,

ee I a caciiiesinmatincnebiesintesinsinintensmaseninoniin 18, 20, 21

Utility Air Regulatory Grp. v. EPA, 1348. Ct. 2427

STII biclisiisicnsianeintsaptinesctinsandastantiitebinebianiiapsnsatinneaabgiiis 17, 18, 20

Statutes, guidelines, and regulations:

Dodd-F rank Wall Street Reform and Consumer

Protection Act, Pub. L. No. 111-208,

ERR EE SEER Pp ee a LaF

ITI cial hina seendctededeetnianseninesiaensibasneiibiiiiaaineninnitiiaalameitaiien 2

Sarbanes-Oxley Act of 2002, Pub. L. No, 107-204, 116

atid sien hcireachcciesebiincianesciesboianicmnmeetiagpensapieindeassien 2

aan 4

Securities Exchange Act of 1934, 15 U.S.C. 78a

OE I erettetenmsisetntccteneremennscneeniocrerrerenemtnnemninmaninnenmanennnnetinn 4

I ircciininsinnicattcisstintiterasebeiiniinseunniionsiaiiniesois 5, 21

Be es HG estbittectnctiincsessesisondustneciabainbeianbeaniitt 4, 21

a a I cistrreysincsiinrascnstsenuilensicnnesiasiniibuitineteieaesinnibiaes 5

Nii scan uscnichapentitnaaceipaipitanaiiliael passim

ie ncincncienniaicniciniamamniamints 3, 18

jt SEA ERTS Araneae eae passim

BD CA Te cecccnccenecensnessteseorsncnsenocess 3, 19, 20, 26

15 U.S.C. TBu-GIDX1)......0cecrccccorssrcceerenseccrsessersnsorersnsersenss 19

Statutes, guidelines, and regulations—Continued: Page

15 U.S.C. T8u-G(n)(L (A) ....ccccccccsseseesersseses 3, 15, 32, 33, 34

Be TL aias Per EE ct rcecevintesincenssresvenntmenenemionnes 3, 15

15 U.S.C. T8u-G(h)(1 (AHI)... ecececeeeeeeeenees 4, 15, 16, 20

15 U.S.C. T8u-G(N)L (A) (ii).............eccceeseeeceeeeecesnees passim

gs eh ee 5, 6, 31

Be a Fe iscenccanncenccssmennnicereseenmernatonees 31

15 U.S.C. 78u-6(h)(1)(B Mili) T) (aa) 0 eee ceeeeeeeeeeneees 6

eee 6

BS CEB. Te Rice cncesenvecnosencsenmetnscenesincenneess 31

SD Cs IEEE srenveecercensaizeseesecnsseneenertnnaeniin 21, 24

Fe ee ee icictsseniteesierecsincinerensesesitrstenannninonniciiansnen 31

Fa as SE airccecesncinsesinscictenstanicmmsintevtiinnenpintasses 6, 33

Whistleblower Protection Act of 1989, Pub. L. No.

101-12, 103 Stat. 32:

I 16

ere 16

Ce a SE ete ee eos ae 16

eat RE I RP ee Ee SSL 16

Tn SECIS RAS SSS Ea a aek SS Rae Mere Aer ns 5, 21

I ice 4, 5, 15, 21, 25

I ao 1 os niuamsnabeieielian 5, 11, 21

18 U.S.C. 1514A(aK1(C)....0...ccrcesecreseeees inte ticocsioaiiniidamabiaidia 16

| SYS REESE ESSN ARR aed eee tsaler ar se 5

a 31

I sumeiniadiiaiehaiasdiabadnabions 31

Be IIIT... cccsepuasnenaioisianinammuieniespetiaian 6

ft RR RI Se kecar nnn eae toca 6, 31

Nee ee ais eceaaremsmabonabe 31

oe sesiniousenneanmadoaiea 31

BD Pre EE, cxscncectcccseceecetenewsesens se APES Shea 31

SEA: Seid siestierncnernenteinnimmnsrermnimsienemmnnineinennnnins 31

Vil

Statute, guidelines, and regulations—Continued: Page

i ciineinietnionauniianinisvaiabncansieievennesitebiniawns 6

United States Sentencing Guidelines:

I aii tec cei alate ean telah tdeeistidiememebolanideténantadebal 29

eR GTA PEE SE Seek Cr nae ee ES 29

17 C.F.R.:

Pt. 205:

RE AEA AA oars ee ee ERI RRR NE 5

RTI A ETT sae Ae Es 21

Pt. 240:

REECE Ae eee aero a h

DN caeiraenaieianl 6, 7, 33

EE ART ee STR RS! 6

a esddlbaneniapeaen 1

I ia 7, 33

Section BED.2Z1F BID) .......0-:-r-cerecscrseressrecseseesers 33

Section 240.21 F-2(1)(1 (fii) ...........sceseceeseesersteresereeens 33

I I ETD cisiccnsnitscsnnsesesonscnscieaiccvosevevensince SN

ee a viicrtcnncctocsvviccscnsosscossesessninubetnens &

ee cssinsindeautamnmiitions 8

Ce awed s

Section 240.21 F'-O(a).......cccccccccsssesscsoseeeers- 7, 18, 21, 26

Pt. 270:

Ee 5

ID ins ceacngneshtpeecaipiasbbiemeedeishonss 5

29 C.F.R. Pt. 1980:

Sections 1980.103-1980.110..............:0:cc0.cceceseenevereneenes 6, 31

i seeeaninasiondiasalcaebaseiiailaeds 6, 31

Miscellaneous:

156 Cong. Rec. (2010):

Vill

Miscellaneous—Continued: Page

estan achansicieiigumnepinaninidsiniabininens dtp neniiniiitn 2

OS EEE EE SEA Sere a a eT ee 2

DOL, Whistleblower Investigation Data F Y2006-

F Y2016, https://www.whistleblowers.gov/

3DCharts-F Y2006-F Y2016.pdf (last visited Oct. 16,

RUSTE Ea 32

75 Fed. Reg. 70,488 (Nov. 17, 2010) ..........ccccccceseeseserscneeeeees 35

76 Fed. Reg. 34,300 (June 13, 2011) ......20.e ec cceeeeeeees passim

80 Fed. Reg. 47,829 (Aug. 10, 2015) 0.0.0... ccceceeseeeeeeenens 7

H.R. 3817, 111th Cong., 2d Sess. § 203

[§ 21F (a)-(d), (f), (g)(1) and (i)(4)] (Dec. 17, 2010)........... 28

H.R. 4173, 111th Cong., 2d Sess. § 7203(a)

[$ 21F(a)-(d), (f), (g)(1) and (j)(4)] (introduced in

the House Dec. 2, 2009; passed by the House Dec.

Bile ee isinleiainicassaiougandiintaitealabidinesemstmaniiniaddakemaniicsinieniccemeccsion 28

Hearing Before the House Comm. on Financial

Services: Public Policy Issues Raised by the

Report of the Lehman Bankruptcy Examiner,

Be eg Sie Sy ID coreseeccecnccmeneinsesinccnesensascerecsscese 2

Stephen Kohn, Clarifying Anti-Retaliation Protec-

tions Under Dodd-F rank, Law 360, June 22, 2017,

https://www.law360.com/articles/93626f/clarifying-

anti-retaliation-protections-under-dodd-frank (last

| LL ea 28

International Handbook on Whistleblowing Re-

search (A.J. Brown et al. ed, 2014)..........:cccccccescecereseeeeees 23

Samuel C. Leifer, Note, Protecting Whistleblower

Protections in th« Dodd-F rank Act, 113 Mich. L.

Pe I iii in cceneslecinatinpenincdaoninidubasteiichanseebiannie 23

Merriam-Webster Online Dictionary,

http://www.merriam-webster.com/dictionary (last

ES EAL RR 15

Miscellaneous—Continued: Page

Janet P. Near & Marcia P. Miceli, After the Wrong-

doing: What Managers Should Know About

Whistleblowing, 59 Bus. Horizons 105 (2016)....0.....-....0.. 23

New Oxford American Dictionary (3d ed. 2010)............... 15

S. Rep. No. 176, 111th Cong., 2d Sess. (2010)......ccccccccccccseee. 8

SEC, 2016 Annual Report to Congress on the Dodd-

Frank Whistleblower Program. ...cccccccccocesssseseecersseeesseseees 23

Antonin Sealia & Bryan A. Garner, Reading Law:

The Interpretation of Legal Tewts (2012)........cccccc0e000. 9,17

U.S. Attorney’s Manwal 9-28.300.A(7) (2017) ....cccccccccoceoeee 29

In the Supreme Court of the Anited States

No. 16-1276

DIGITAL REALTY TRUST, INC., PETITIONER

Vv.

PAUL SOMERS

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BRIEF FOR THE UNITED STATES AS AMICUS CURIAE

SUPPORTING RESPONDENT

INTEREST OF THE UNITED STATES

The question presented in this case concerns the

scope of the prohibition on employer retaliation against

whistleblowers that is imposed by the Dodd-Frank Wal]

Street Reform and Consumer Protection Act (Dodd-

Frank), Pub. L. No. 111-203, 124 Stat. 1376. The United

States has a substantial interest in the resolution of that

question. The Department of Justice and the Securities

and Exchange Commission (Commission) administer

and enforce provisions of Dodd-Frank, including the

anti-retaliation provisions codified at 15 U.S.C. 78u-

6(h)(1), and other federal securities laws. The Commis-

sion has issued a rule that addresses the question pre-

sented, 17 C.F.R. 240.21F-2(b), and the Commission

filed an amicus brief supporting respondent in the court

of appeals.

(1)

STATUTORY AND REGULATORY

PROVISIONS INVOLVED

Pertinent statutory and regulatory provisions are

reproduced in this brief’s appendix. App., infra, la-30a.

STATEMENT

1. In the wake of the 2008 financial crisis, Congress

enacted Dodd-Frank to “promote the financial stability

of the United States by improving accountability and

transparency in the financial system.” 124 Stat. 1376.

Dodd-Frank responded to numerous perceived short-

comings in financial regulation, including the failure of

the Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley), Pub.

L. No. 107-204, 116 Stat. 745, to pre ent retaliation

against corporate whistleblowers who alerted internal

management about securities-law violations and fraud.

In particular, Members of Congress expressed con-

cern that whistleblowers at Lehman Brothers had

“tried to alert management to illegal accounting tricks,”

but were “fired” in retaliation for their internal disclo-

sures. 156 Cong. Rec. 7235, 7236 (2010); see id. at '7083-

7084 (Lehman Brothers did not “listen to the alerms

that were sounded in [its] own company, * * * [iJnstead,

those people who were trying to tell the truth were

forced out.”); Hearing Before the House Committee on

Financial Services: Public Policy Issues Raised by the

Report of the Lehman Bankruptcy Examiner, 111th

Cong., 2d Sess. 68, 75-77, 128, 175-178 (2010) (describ-

ing Lehman Brothers whistleblowers, including one

who was fired days after informing internal manage-

ment about improper accounting practices and another

at a Lehman Brothers subsidiary who was fired for dis-

closures to the FBI).

To address that problem, among others, Congress

included two distinct measures in Section 922 of Dodd-

Frank, codified at 15 U.S.C. 78u-6, that “extend[]} pro-

tection comprehensively to corporate whistleblowers.”

Lawson v. FMR LLC, 134 S. Ct. 1158, 1175 (2014).

a. First, Section 78u-6 creates an award program

for whistleblowers who provide useful information to

the Commission. Subsection (a) states that “lin this

section the following definitions shall apply,” and then

defines six terms that are used to delineate the award

program: “covered judicial or administrative action,”

“Fund,” “original information,” “monetary sanctions,”

“related action,” and “whistleblower.” 15 U.S.C. 78u-

fi(a). The term “whistleblower” is defined as “any indi-

viilual who provides, or 2 or more individuals acting

jointly who provide, information relating to a violation

of the securities laws to the Commission, in a manner

established, by rule or regulation, by the Commission.”

15 U.S.C. 78u-6(a)(6). Subsections (b)-(g) govern the

operation of the whistleblower award program. 15

U.S.C. T8u-6(b)-(g).

b. Second, Section 78u-6 prohibits retaliation

by employers against whistleblowers. Subparagraph

(hX1)(A) provides that, in three specified scenarios,

“Injo employer may discharge, demote, suspend,

threaten, harass, directly or indirectly, or in any other

manner discriminate against, a whistleblower in the

terms and conditions of employment because of any law-

ful act done by the whistleblower.” 15 U.S.C. 78u-

6(h)(1)(A).

Clause (i) prohibits retaliation against a whistle-

blower for lawful acts in “providing information to

the Commission in accordance with this section.”

15 U.S.C. 78u-6(hX 1)(A)(i). Clause (ii) prohibits retali-

ation against a whistleblower for lawful acts in “initiat-

ing, testifying in, or assisting in any investigation or

judicial or administrative action of the Commission

based upon or related to [the] information” provided

to the Commission under clause (i), 15 U.S.C.

78u-6(h)(1)(A)(ii).

Clause (iii) was added late in the legislative process,

after both Houses of Congress had passed bills that in-

cluded only clauses (i) and (ii), and amid the discussion

of Sarbanes-Oxley’s failure to protect internal whistle-

blowers at Lehman Brothers. See p. 2, supra; H.R.

4173, 111th Cong. § 922(a) (2010) (conference base text

approved for use by the Senate in May 2010). Clause

(iii) prohibits retaliation against a whistleblower for

lawful acts in “making disclosures that are required or

protected under” several cross-referenced laws, includ-

ing Sarbanes-Oxley; the Securities Exchange Act of

1934 (Exchange Act), 15 U.S.C. 78a et segq.,' “including

section 78j-1(m)”’; 18 U.S.C. 1513(e); and “any other

law, rule, or regulation subject to the jurisdiction of the

Commission.” 15 U.S.C. 78u-6(h)(1)(A)(iii).

The laws cross-referenced by clause (iii) require or

protect disclosures to other entities in addition to the

Commission. Sarbanes-Oxley, for example, includes a

provision entitled “Whistleblower Protections for Em-

ployees of Publicly Traded Companies,” that prohibits

employer retaliation against employees for disclosing

violations of certain securities and fraud laws to any

federal “regulatory or law enforcement agency,” “any

Member of Congress or any committee of Congress,” or

' The whistleblower provisions of Dodd-Frank are codified as

Section 21F of the Exchange Act, which clause (iii) incorporates by

reference through the phrase “this chapter.” 15 U.S.C. 78u-

6(h)(1)(A)(iii).

2 Section 78j-1(m) was enacted through Sarbanes-Oxley, 116 Stat.

775-777, and is codified as part of the Exchange Act.

“a person with supervisory authority over the em-

ployee.” 18 U.S.C. 1514A(a)(1). Another provision of

Sarbanes-Oxley—one that clause (iii) expressly singles

out—protects certain internal disclosures about audit-

ing matters. 15 U.S.C. 78j-1(m)(4). Similarly, Sarbanes-

Oxley requires attorneys representing public compa-

nies to disclose securities-law or fiduciary-duty viola-

tions to specified company officials, not to the Commis-

sion. 15 U.S.C. 7245; see 17 C.F.R. 205.3.

The Exchange Act, which clause (iii) also cross-

references, similarly requires registered public ac-

counting firms to report illegal acts discovered during

certain audits to the audited public company’s manage-

ment. 15 U.S.C. 78j-1(b). Another statute that clause

(iii) cross-references, 18 U.S.C. 1513(e), prohibits harm-

ful retaliation against any person for “providing to a law

enforcement officer any truthful information relating

to” a federal offense. And numerous other laws, rules,

or regulations “subject to the jurisdiction of the Com-

mission,” 15 U.S.C. 78u-6(h)(1)(A)(iii), require internal

reporting.*

c. Like a “person” who alleges a violation of the

whistleblower provisions of Sarbanes-Oxley, 18 U.S.C.

1514A(b), an “individual” who alleges a violation

of Dodd-Frank’s anti-retaliation provisions may seek

relief from his or her employer, 15 U.S.C. 78u-

6(h)(1)(B)(i). The remedial schemes created by the two

* See, e.g., 17 C.F.R. 270.38a-1(a)(4) (mutual fund’s chief compli-

ance officer must report material compliance matters to fund’s

board); 17 C.F.R. 240.17a-5(h) (broker-dealer’s auditor must report

material inadequacies to broker-dealer’s chief financial officer); 17

C.F .R. 275.204A-1(a)(4) (investment adviser must adopt code of eth-

ics requiring supervised persons to report violations thereof to chief

compliance officer).

statutes, however, differ significantly. Sarbanes-

Oxley directs an aggrieved person to file a complaint

with the Department of Labor (DOL), which can either

adjudicate the claim through an administrative

process subject to review by a federal court of appeals,

or leave the person to bring a cause of action in federal

district court. Jbid.; 49 U.S.C. 42121(b); 29 C.F.R.

1980.103-.110, 1980.114. Dodd-Frank, by contrast,

allows an immediate action in federal district court.

15 U.S.C. 78u-6(h)(1)(B)(i). Sarbanes-Oxley includes

a six-month baseline statute of limitations, 18 U.S.C.

1514A(b)(2)(D), while Dodd-F rank’s baseline statute of

limitations is six years, 15 U.S.C. 78u-6(h)(1)(B)(iii)(1)(aa).

And Sarbanes-Oxley provides that an employee “shall be

entitled to all relief necessary to make the employee

whole,” including back pay, 18 U.S.C. 1514A(c)(1), while

Dodd-F rank authorizes double “the amount of back pay

otherwise owed,” 15 U.S.C. 78u-6(h)(1)(C)(ii).

d. Section 78u-6 authorizes the Commission to “is-

sue such rules and regulations as may be necessary or

appropriate to implement the provisions of this section

consistent with the purposes of this section.” 15 U.S.C.

78u-6(j).

2. In 2011, the Commission issued Rule 21F-2 and

related rules addressing both the award and anti-retal-

iation provisions of Section 78u-6. See 76 Fed. Reg.

34,300 (June 13, 2011).

For purposes of the award program, Rule 21F-2

states that “[yJou are a whistleblower if, alone or jointly

with others, you provide the Commission with infor-

mation” related “to a possible violation of the Federal

securities laws” pursuant “to the procedures set forth

in” another Commission rule. 17 C.ER. 240.21F-2(a).

That other rule requires information to be submitted ei-

ther through the Commission’s website or by mailing or

faxing a form to the Commission’s Office of the Whistle-

blower. 17 C.F.R. 240.21F-9(a).

For purposes of the anti-retaliation provisions, Rule

21F-2 states that a person is a “whistleblower” if he pro-

vides information that he reasonably believes relates to

a possible violation of the securities or certain criminal

fraud laws, and if he “provide[s] that information in a

manner described in” clauses (i) through (iii) of

15 U.S.C. 78u-6(h)(1)(A)—that is, to the Commission as

part of the whistleblower award program, through cer-

tain forms of participation in a Commission proceeding,

or through disclosures protected or required by the

laws cross-referenced in clause (iii), which protect inter-

nal disclosures and do not require reporting to the Com-

mission. 17 C.F-R. 240.21F-2(b)(1).*

In adopting its rules, the Commission explained that

encouraging reporting through internal compliance

procedures, such as those required or protected by the

laws cross-referenced in clause (iii), advances the pur-

poses of Section 78u-6. Specifically, the Commission ex-

plained that internal reporting enables the private sec-

tor to screen out meritless claims, and thereby improves

the quality of whistleblower tips later brought to the

Commission; that internal reporting gives businesses

the opportunity to self-correct without the need for in-

trusive Commission investigations; and that internal re-

* In 2015, the Commission issued an interpretive rule explaining

that a whistleblower is protected from retaliation even if he does not

utilize the channels established by the Commission for the award

program—i.e., by reporting through the Commission’s website or

its Office of the Whistleblower. 80 Fed. Reg. 47,829 (Aug. 10, 2015).

porting thereby promotes efficient use of both corpo-

rate and government resources. See 76 Fed. Reg. at

34,323-34,325, 34,359 & nn.449-450 (citing S. Rep. No.

176, 111th Cong., 2d Sess. 110 (2010)).° The Commission

also considered and responded to public comments,

many of which urged the agency to adopt rules that

would encourage or require internal reporting. E.g., id.

at 34,302 n.21, 34,326 n.230 (citing comment letters from

the U.S. Chamber of Commerce).

3. Petitioner is a public company operating as a real

estate investment trust. Pet. App. 14a. Respondent was

a portfolio-management vice president employed by pe-

titioner from 2010 to 2014. Jd. at 3a, 14a. Respondent

has alleged that he made multiple reports to petitioner’s

senior management about alleged securities-law viola-

tions by his supervisor, including elimination of internal

corporate controls in violation of Sarbanes-Oxley, hid-

ing millions of dollars in cost overruns, and granting no-

bid contracts and unsubstantiated payments to friends.

Id. at 3a, 14a-15a. Respondent has further alleged that

petitioner fired him because of his disclosures. /bid. It

is undisputed that respondent did not “report his con-

cerns to the SEC before [petitioner] terminated his em-

ployment.” Jd. at 3a.

Respondent filed this lawsuit. His complaint alleged,

inter alia, that petitioner had fired him for making dis-

closures that were required or protected under Sar-

banes-Oxley and thus were protected by clause (iii) of

* The Commission’s rules governing the whistleblower award pro-

gram also underscore the benefits of internal reporting in advancing

the purposes of Section 78u-6. See 17 C.F.R. 240.21F-4(b)(7) and

(c)(3), 240.21 F -6(a)(4) and (b)(3) (treating internal reporting as as-

sisting in establishing whistleblower award eligibility and in enhanc-

ing award amount).

the anti-retaliation provisions in 15 U.S.C. 78u-

6(h)(1)(A)(iii). Pet. App. 3a, 14a-15a. Petitioner moved

to dismiss the suit, arguing that respondent was not a

“whistleblower” under Section 78u-6 because he had

not provided information “to the Commission” as re-

quired by the definition of “whistleblower” in 15 U.S.C.

78u-6(a)(6). Pet. App. 3a, 17a-18a.

4. The district court denied petitioner’s motion to

dismiss. Pet. App. 12a-48a. The court explained that

clause (iii)’s protection of disclosures by whistleblowers

under staiutes (like Sarbanes-Oxley) that require or

protect disclosures to entities other than the Commis-

sion “conflict{[s} with the assumption that only those

who report to the” Commission are protected. Jd. at

33a. The court observed that, in circumstances where

applying a statutory definition “would cause a provision

to contradict another provision, whereas the normal

meaning of the word would harmonize the two, the nor-

mal meaning should be applied.” /d. at 28a (quoting An-

tonin Scalia & Bryan A. Garner, Reading Law: The In-

terpretation of Legal Texts 228 (2012)). The court held

that the tension between the anti-retaliation protections

and the statutory definition created ambiguity, and that

the Commission’s reasonable interpretation in Rule

21F-2 was entitled to deference. Jd. at 35a-41a.

5. On interlocutory appeal, the court of appeals af-

firmed. Pet. App. la-lla.

The court of appeals concluded that Section 78u-6’s

“definitional provision * * * should not be dispositive

of the scope of [Section 78u-6’s] later anti-retaliation

provision.” Pet. App. 7a. The court explained that lim-

iting retaliation protection to whistleblowers who re-

port to the Commission “would make little practical

sense and undercut congressional intent” because it

“would, in effect, all but read [clause] (iii) out of the stat-

ute.” Jd. at 8a. The court stated that it would avoid that

“illogical” result by applying the statutory definition

only to the whistleblower-award provisions. /bid. As

an alternative ground for its decision, the court of ap-

peals joined the Second Circuit by concluding that “the

agency responsible for enforcing the securities laws” —

the Commission—“has resolved any ambiguity and its

regulation is entitled to deference.” /d. at 10a; see Ber-

man v. Neo@Ogilvy LLC, 801 F.3d 145, 146, 150-155

(2d Cir. 2015).

Judge Owens dissented. Pet. App. lla. He would

have followed the reasoning of Judge Jacobs’s dissent

in Berman, 801 F.3d at 155, and the panel opinion in

Asadi v. G.E. Energy (USA), L.L.C., 720 F.3d 620 (5th

Cir. 2013). Pet. App. 11a.

SUMMARY OF ARGUMENT

The court of appeals correctly held that 15 U.S.C.

78u-6(h)(1)(A)(Giii) prohibits employers from retaliating

against whistleblowers who make specified disclosures,

regardless of whether those whistleblowers report to

the Commission.

A. Section 78u-6 establishes two distinct measures .

to encourage whistleblowers to report potential

securities-law violations and fraud. First, the provision

creates an award program for whistleblowers who bring

valuable information to the Commission. Second, the

provision prohibits job-related retaliation against whis-

tleblowers who make specified types of disclosures. The

text and structure of the statute indicate that the spe-

cialized definition of “whistleblower” applies to the

award program but not to the retaliation prohibitions.

Subsection (a) of Section 78u-6 defines six terms,

each of which appears in the award provisions created

in Subsections (b) through (g), and each of which fits

naturally there. The term “whistleblower,” for exam-

ple, requires reporting to the Commission, consistent

with the fact that awards are available only after suc-

cessful Commission actions.

Except for “whistleblower,” however, none of Sec-

tion 78u-6’s defined terms appears in the anti-

retaliation provisions of paragraph (h)(1). The statu-

tory text and structure indicate that paragraph (h)(1)

uses “whistleblower” in accordance with its ordinary

meaning, not as a term of art that requires reporting to

the Commission. Subparagraph (h)(1)(A) contains

three clauses that prohibit retaliation for three distinct

types of whistleblowing. The first two clauses reference

reports to the Commission, but clause (iii) does not—a

textual distinction that should be read to make a sub-

stantive difference. Indeed, clause (iii) protects disclo-

sures under laws that themselves protect or even re-

quire “{w]histleblower[s|” to report to entities other

than the Commission. 18 U.S.C. 1514A(a)(1).

Extending the specialized definition of “whistle-

blower” to clause (iii) would markedly narrow the ban

on employer retaliation and would create anomalies in-

consistent with the statutory language and design. Un-

der petitioner’s reading, clause (iii) would prohibit em-

ployers from retaliating only against employees who

have reported to the Commission. But employers gen-

erally do not know that an employee has reported to the

Commission, which is required to keep reports confi-

dential, so petitioner’s reading would substantially di-

minish the retaliation prohibition’s deterrent effect. In

addition, under petitioner’s reading, clause (iii) would

not protect an employee who reports a suspected

securities-law violation to company management, in the

hope of triggering internal compliance mechanisms that

will make a report to the Commission unnecessary, and

who is fired immediately thereafter. Excluding such

persons from Dodd-Frank’s protections would depart

from usual understandings of the term “whistleblower”

and would undermine Congress’s effort to promote

more rigorous and effective internal compliance pro-

grams.

This Court has often confirmed that a statutorily de-

fined term may retain its ordinary meaning where nec-

essary to give effect to the language and objective of a

statute. The court of appeals applied that sensible ap-

proach, preserving the specialized meaning of “whistle-

blower” in the award provisions, while applying its or-

dinary meaning to facilitate the effective implementa-

tion of the anti-retaliation provisions.

B. The legislative background and purpose further

support the court of appeals’ construction. The special-

ized definition of “whistleblower” that requires report-

ing to the Commission first appeared in the bill that be-

came Dodd-Frank at a stage of the drafting process

when only the award provisions used that term. And

clause (iii) of the anti-retaliation provision, which cross-

references federal statutes that expressly protect or

require disclosures to entities other than the Commis-

sion, was adopted at the final stage of the legislative

process, after both Houses of Congress had passed the

bill. There is no indication that “the conferees who ac-

cepted the last-minute insertion of” clause (iii) intended

this “subdivision of a subsection” to have “the extremely

limited scope it would have” if the term “whistleblower”

is construed to require reporting to the Commission.

Berman v. Neo@Ogilvy LLC, 801 F.3d 145, 154-155 (2d

Cir. 2015).

Congress enacted Dodd-Frank against the backdrop

of Sarbanes-Oxley, which protects internal whistle-

blowers who report securities-law violations to corpo-

rate management, but which had failed to expose im-

proper financial practices that precipitated the 2008 fi-

nancial crisis. As its cross-reference to Sarbanes-Oxley

and creation of new remedies demonstrate, Section

78u-6(h)(1) is intended to strengthen protections for in-

ternal whistleblowers. Reading that provision to pro-

tect only whistleblowers who report to the Commission

would defeat Congress’s purpose, weaken internal cor-

porate-compliance programs, and potentially flood the

Commission with allegations that have not been vetted

by the corporate insiders best situated to address them

in the first instance.

C. At a minimum, the tension between the special-

ized definition of “whistleblower” in Subsection (a) and

its more natural meaning in paragraph (h)(1) creates an

ambiguity for the Commission to resolve. The Commis-

sion did so reasonably, pursuant to an express conferral

of rulemaking authority, after following notice-and-

comment procedures, and with a careful explanation

drawing on its expertise in securities law. Petitioner’s

new assertion of procedural deficiencies in the rule is

forfeited, outside the question presented, and without

merit. The Commission’s reasonable reading of Section

78u-6(h)(1) to protect both internal and external whis-

tleblowers is entitled to deference.

ARGUMENT

THE PROHIBITION ON EMPLOYER RETALIATION

AGAINST WHISTLEBLOWERS IN 15 U.S.C. 78u-6(h)(1) IS

NOT LIMITED TO WHISTLEBLOWERS WHO REPORT TO

THE COMMISSION

Section 78u-6 includes two distinct measures to en-

courage whistleblowers to report securities-law viola-

tions: awards for whistleblowers who bring valuable in-

formation to the Commission, and protection against

job-related retaliation for whistleblowers who make de-

scribed disclosures. The specialized definition of “whis-

tleblower” codified in Subsection (a), which requires re-

porting to the Commission, fits naturally with the award

program. Use of that definition in paragraph (h)(1),

however, would subvert the effective implementation of

the anti-retaliation provisions, which protect disclo-

sures to other entities as well. The text and structure

of the statute as a whole, as well as Congress’s overrid-

ing policy of encouraging internal reporting through

corporate-compliance mechanisms, indicate that the or-

dinary meaning of “whistleblower” applies to the anti-

retaliation provisions. At a minimum, the Commission’s

rule adopting that interpretation, issued after notice-

and-comment procedures and pursuant to an express

statutory conferral of rulemaking power, is a reasona-

ble resolution of statutory ambiguity and is accordingly

entitled to deference.

A. The Statutory Text And Structure Indicate That The

Anti-Retaliation Provisions Use The Term “Whistle-

blower” In Its Ordinary Sense

1. Section 78u-6 prohibits an “employer” from retal-

iating against “a whistleblower in the terms and condi-

tions of” the whistleblower’s “employment because of

any lawful act done by the whistleblower” in three spec-

ified contexts. 15 U.S.C. 78u-6(h)(1)(A). Clause (i) pro-

hibits retaliation for “providing information to the Com-

mission in accordance with this section,” including the

whistleblower award program defined earlier in the

Section. 15 U.S.C. 78u-6(h)(1)(A)(i). Clause (ii) prohib-

its retaliation for “initiating, testifying in, or assisting

in any investigation or judicial or administrative action

of the Commission based upon or related to such infor-

mation” —that is, the information provided to the Com-

mission through the prescribed means. 15 U.S.C. 78u-

6(h)(1)(A)(ii). Clause (iii) prohibits retaliation for “mak-

ing disclosures that are required or protected under”

several provisions of law, including Sarbanes-

Oxley, the Exchange Act, 18 U.S.C. 1513(e), and “any

other law, rule, or regulation subject to the jurisdiction

of the Commission.” 15 U.S.C. 78u-6(h)(1)(A)(iii).

Read in accordance with its ordinary meaning, the

term “whistleblower” is not limited to people who re-

port to the Commission, and it naturally encompasses

employees who report wrongdoing to company manage-

ment. See, ¢g., New Oxford American Dictionary

1970-1971 (3d ed. 2010) (defining “whistle-blower” as “a

person who informs on someone engaged in an illicit ac-

tivity”); Merriam-Webster Online Dictionary, http://

www.merriam-webster.com/dictionary/whistleblower

(“one who reveals something covert or who informs

against another”). That understanding is consistent

with the origin of the term—the action of blowing the

whistle. See LaManque v. Massachusetts Dep't of

Emp't & Training, 3 F. Supp. 2d 83, 92 (D. Mass. 1998)

(“Whistleblowers may ‘blow the whistle’ on any number

of persons, about any number of things for any number

of reasons.”),°

The whistleblowing actions protected by subpara-

graph (h)(1)(A) of Section 78u-6 are not limited to

providing information to the Commission. Although

clause (i) includes that limitation, clause (ii) encom-

passes distinct acts of whistleblowing by “initiating, tes-

tifying in, or assisting” in Commission proceedings that

are “based upon or related to” information provided to

the Commission. 15 U.S.C. 78u-6(h)(1)(A)(ii). And

clause (iii)’s lack of any such reference to the Commis-

sion indicates that “Congress intended a difference in

meaning” from the requirement of Commission report-

ing referenced in clauses (i) and (ii). Loughrin v.

United States, 134 S. Ct. 2384, 2390 (2014). That infer-

ence is reinforced by clause (iii)’s prohibition of retalia-

tion for “disclosures that are required or protected un-

der” other provisions of law that require or protect dis-

closures to entitites other than the Commission.

15 U.S.C. 78u-6(h)(1)(A)Giii); see pp. 4-5, supra. As

relevant here, Sarbanes-Oxley provided “|w)histle-

blower protection” for respondent’s disclosure of al-

leged securities-law violations and fraud to “a person

with supervisory authority over” him. 18 U.S.C.

1514A(a)(1)(C). Accordingly, under the ordinary mean-

ing of clause (iii), petitioner was prohibited from firing

®° Likewise, numerous federal statutes use “whistleblower” in its

ordinary sense. See, ¢.g., Whistleblower Protection Act of 1989,

Pub. L. No. 101-12, §§ 2(a)(3), (b)(2)(A), 4(a) and (b), 103 Stat. 16,

16, 32; see also Department of Homeland Sec. v. MacLean, 136 S.

Ct. 913, 916 (2015) (describing “whistleblower protection” under the

Act).

respondent for his disclosure to company management

of alleged corporate wrongdoing.

2. The definition of “whistleblower” codified at 15

U.S.C. 78u-6(a)(6), which requires reporting “to the

Commission, in a manner established” by the Commis-

sion, does not compel a different result.

a. As petitioner correctly notes (Br. 17-18), statu-

tory definitions “control the meaning of statutory words

*** in the usual case.” Lawson v. Suwannee Fruit &

S.S. Co., 336 U.S. 198, 201 (1949) (emphasis added). The

Court has made clear, however, that this is not an iron-

clad rule. See ibid.; Environmental Def. v. Duke En-

ergy Corp., 549 U.S. 561, 575-576 (2007) (explaining that

there is no “irrebuttable ‘presumption that the same de-

fined term in different provisions of the same statute

must’ be interpreted identically”); Philko Aviation, Inc.

v. Shacket, 462 U.S. 406, 412 (1983) (noting that a stat-

utory definition is “not dispositive”). Rather, “a statu-

tory term—even one defined in the statute—may take

on distinct characters from association with distinct

statutory objects calling for different implementation

strategies.” Utility Air Regulatory Grp. v. EPA, 1348.

Ct. 2427, 2441 (2014) (UARG) (citation omitted); accord

Scalia & Garner 228 (“Definitions are, after all, just one

indication of meaning—a very strong indication, to be

sure, but nonetheless one that can be contradicted by

other indications.”). That is true even when the defini-

tional provision states expressly that the specialized

meaning applies to a particular section or chapter of a

law. See UARG, 134 8S. Ct. at 2441; Duke Energy, 549

U.S. at 576.

This Court has accordingly declined to apply “in me-

chanical fashion” statutory definitions that would “cre-

ate obvious incongruities in the language” of a statute

or “destroy one of the major purposes” of the law. Su-

wannee Fruit, 336 U.S. at 201; see, e.g., UVARG, 134 8.

Ct. at 2441; Duke Energy, 549 U.S. at 575-576; United

States v. Cleveland Indians Baseball Co., 5382 U.S. 200,

213 (2001); Robinson v. Shell Oil Co., 519 U.S. 337, 343-

346 (1997); United States v. Public Utilities Comm’n of

Cal., 345 U.S. 295, 312-313 (1953). That is especially

true when a statutory definition conflicts with the de-

fined term’s “most natural” meaning. Philko, 462 U.S.

at 411; see Suwannee Fruit, 336 U.S. at 201; Franklin

Cal. Tax-Free Trust v. Puerto Rico, 805 F.3d 322, 340

(ist Cir. 2015) (“Where statutory definitions give rise to

such problems, a term may be given its ordinary mean-

ing.”), aff’d, 136 S. Ct. 1938 (2016).

In some cases, the ordinary meaning adopted may be

narrower than the statutory definition, see, e.g., VARG,

134 S. Ct. at 2441-2442; in other cases, the ordinary

meaning adopted may be broader than the statutory

defintion, see, e.g., Suwannee Fruit, 336 U.S. at 201-206

(adopting the “broader and more usual” meaning of

“disability,” rather than treating the word as a special-

ized statutory “term of art”). In all cases, “[cjontext

counts.” Duke Energy, 549 U.S. at 576.

b. The definition on which petitioner relies states

that “[t]he term ‘whistleblower’ means any individual

who provides, or 2 or more individuals acting jointly

who provide, information relating to a violation of the

securities laws to the Commission, in a manner estab-

lished, by rule or regulation, by the Commission.”

15 U.S.C. 78u-6(a)(6). The “manner established” by

Commission rule is by reporting “[o]nline, through the

Commission's Web site,” or “[bly mailing or faxing a”

specified form “to the SEC Office of the Whistle-

blower.” 17 C.F.R. 240.21 F-9(a).

This specialized definition of “whistleblower,” like

the five other definitions contained in Subsection (a),

fits naturally with the whistleblower award program

created by Subsections (b)-(g) of Section 78u-6. Dodd-

Frank directs the Commission to pay awards to “whis-

tleblowers who voluntarily provided original infor-

mation to the Commission that led to the successful en-

forcement of the covered judicial or administrative ac-

tion.” 15 U.S.C. 78u-6(b)(1). By defining the term

“whistleblower” to mean a person who reports wrong-

doing “to the Commission,” Section 78u-6(a)(6) incorpo-

rates a fundamental eligibility criterion under the

award program. Likewise, because the payment of

awards is governed by “regulations prescribed by the

Commission,” ibid., a whistleblower must report “in a

manner established *** by the Commission,” 15

U.S.C. 78u-6(a)(6). And because the award program al-

lows multiple whistleblowers to divide an award of a

statutorily limited amount, 15 U.S.C. 78u-6(b)(1), either

a single “individual * * * or 2 or more individuals acting

jointly” can qualify as a “whistleblower,” 15 U.S.C. 78u-

6(a)(6). Applying the specialized definition of “whistle-

blower” in Subsection (a) to the award program created

by Subsections (b)-(g) thus accords with the fundamen-

tal rule that courts should “interpret the statute as a

symmetrical and coherent regulatory scheme.” F'DA v.

Brown & Williamson Tobacco Corp., 529 U.S. 120, 133

(2000) (citation and internal quotation marks omitted).

ce. By contrast, extending the specialized definition

of “whistleblower” in Subsection (a) to the anti-

retaliation protections in paragraph (h)(1) would “cre-

ate obvious incongruities in the language.” Swwannee

Fruit, 336 U.S. at 201. None of the other five terms de-

fined in Subsection (a)—‘“covered judicial or adminis-

trative action,” “Fund,” “original information,” “mone-

tary sanctions,” or “related action”—appears in para-

graph (h)(1). 15 U.S.C. 78u-6(a). Rather, all of those

terms are used exclusively in Subsections (b)-(g), which

define and delimit the award program. Although the

term “whistleblower” is both defined in Subsection (a)

and used in paragraph (h)(1), extending the specialized

definition to the anti-retaliation provisions would pro-

duce “substantive effect([s]” not “compatible with the

rest of the law.” UARG, 134 S. Ct. at 2442 (citation

omitted); see Public Utilities Comm'n, 345 U.S. at 312

(departing from specialized statutory definition based

on “the statutory scheme as a whole”).

Most significantly, applying the specialized defini-

tion of “whistleblower” to the anti-retaliation provisions

in paragraph (h)(1) would “vitiate much of the protec-

tion afforded by” the ordinary meaning of clauses (ii)

and (iii). Robinson, 519 U.S. at 345. Clause (ii) prohib-

its job-related retaliation against a whistleblower “be-

cause of any lawful act done by the whistleblower * * *

in initiating, testifying in, or assisting in any investiga-

tion or judicial or administrative action of the Commis-

sion” that is “based upon or related to” information pro-

vided to the Commission under Section 78u-6. 15 U.S.C.

78u-6(h)(1)(A)(ii). Petitioner’s argument logically im-

plies that an individual who testifies in a Commission

enforcement action is protected from retaliation only if

he falls within Section 78u-6(a)(6)’s definition of “whis-

tleblower.” Under that approach, an employer could

fire an employee for giving such testimony if the em-

ployee had not previously reported to the Commission

online or through the specified written form. See 15

U.S.C. 78u-6(a)(6); 17 C.F.R. 24021 F-9(a). That con-

struction “would thwart the premise of” clause (ii)’s

protections, which is cause to depart from the statutory

definition. Public Utilities Comm’n, 345 U.S. at 313."

Extending the specialized definition of “whistle-

blower” to clause (iii) would do even greater violence to

the statutory design. As noted above, pp. 4-5, supra,

clause (iii) prohibits retaliation against a whistleblower

for “making disclosures that are required or protected

under” various laws that “require[] or protect| ]”disclo-

sures to recipients other than the Commission. 15

U.S.C. 78u-6(h)(1)(A)(iii). The “[w]histleblower protec-

tion” provisions of Sarbanes-Oxley incorporated by

clause (iii) protect disclosures to any federal “regula-

tory or law enforcement agency,” “any Member of Con-

gress or any committee of Congress,” or “a person with

supervisory authority over the employee.” 18 U.S.C.

1514A(a)(1). A Sarbanes-Oxley provision specifically

referenced in clause (iii), 15 U.S.C. 78j-1(m), expressly

protects internal disclosures about auditing matters.

Other provisions of Sarbanes-Oxley and the Exchange

Act require certain auditors and attorneys to disclose

certain information internally. 15 U.S.C. 78j-1(b) and

7245; see 17 C.F.R. 205.3." And another provision spe-

cifically referenced in clause (iii), 18 U.S.C. 1513(e),

which protects reports to law enforcement officers

’ The limitations that petitioner would place on anti-retaliation

suits under paragraph (h)(1) would also severely weaken the confi-

dentiality protections in 15 U.S.C. 78u-6(h)(2)(A), which generally

require the Commission to keep reported information secret, be-

cause a plaintiff would be required to identify himself as having re-

ported to the Commission in order to bring a cause of action.

* Indeed, attorneys are typically prohibited from reporting to the

Commission. Pet. App. 7a (citing 17 C.F.R. 205.3(d)(2)).

about federal offenses, necessarily requires reporting

to an entity other than the Commission.

Construing clause (iii) to protect only those individ-

uals who report to the Commission would substantially

diminish the practical effect of that provision. Jnter

alia, petitioner’s reading would deny Section 78u-6 pro-

tection to “[{ljegions of accountants and lawyers” that

Congress concluded are “equipped to bring fraud on

investors to a halt,” but who must report internally un-

der the laws cross-referenced in clause (iii). Lawson v.

FMR LLC, 1348. Ct. 1158, 1168 (2014). That would dis-

serve Congress’s objectives by “leaviing] these profes-

sionals vulnerable to discharge or other retaliatory ac-

tion for complying with the law,” id. at 1171, and it is

incompatible with this Court’s characterization of

Dodd-Frank as “extending protection comprehensively

to corporate whistleblowers,” id. at 1175.

Auditors and attorneys are not the only potential

corporate whistleblowers excluded by petitioner’s

interpretation of clause (iii). Given that persons who

suffer employment-related retaliation because of their

disclosures to the Commission are separately protected

by clause (i), the practical effect of clause (iii) under pe-

titioner’s reading is, at most, to extend protection to a

“whistleblower who reports misconduct both to the SEC

and to another entity, but suffers retaliation ‘because

of’ the non-SEC disclosure.” Pet. Br. 32 (quoting 15

U.S.C. T8u-6(h)(1)(A)(iii)); see id. at 22. Petitioner is

correct that clause (iii) applies to such individuals. Con-

struing clause (iii) as limited to such persons, however,

would “shrink to insignificance the provision’s ban on

retaliation” and produce anomalous results. Lawson,

134 S. Ct. at 1166.

Of the whistleblowers who received awards from the

Commission in 2016, about 80% reported internally be-

fore reporting to the Commission. SEC, 2016 Annual

Report to Congress on the Dodd-Frank Whistleblower

Program 18. There are numerous reasons why employ-

ees tend to report internally first, including loyalty to

the organization, hope that supervisors will rectify or

explain the perceived misconduct without the need for

government intervention, or (as with auditors and attor-

neys) a legal obligation to raise a matter in-house. See

Janet P. Near & Marcia P. Miceli, After the Wrongdo-

ing: What Managers Should Know About Whistleblow-

ing, 59 Bus. Horizons 105, 105, 113 (2016). Studies also

show that retaliation for internal reporting, when it oc-

curs, generally follows quickly. See IJnternational

Handbook on Whistleblowing Research 242 (A.J.

Brown et al. ed., 2014). The persons whom clause (iii)

would protect under petitioner’s reading—i.e., those

who report both internally and to the Commission, and

who suffer retaliation because of the internal report-

ing—therefore are “likely to be few in number.” Ber-

man, 801 F.3d at 151; accord Samuel C. Leifer, Note,

Protecting Whistleblower Protections in the Dodd-

Frank Act, 118 Mich. L. Rev. 121, 139 (2014) (noting

that “the majority of incentives for and benefits of in-

ternal whistleblowing * * * are absent [where] the em-

ployee has also reported to the SEC,” and “[t]hus, it is

hard to imagine what motivations would prompt the em-

ployee to make this internal disclosure at all”).°

® Petitioner cites several cases (Br. 32-33 & n.4) in which whistle-

blowers reported both internally and to the Commission. But it is

not clear whether the plaintiffs in any of those cases—most of which

have arisen under Sarbanes-Oxley rather than under Dodd-

Petitioner identifies no good reason that Congress,

having chosen to protect employees from retaliation for

internal disclosures, would have wished to make that

protection contingent on the employees’ making addi-

tional disclosures to the Commission. Petitioner ac-

knowledges (Br. 32) that “an employer will often be un-

aware that an employee has reported to the SEC,” in

part because of the confidentiality protections in

15 U.S.C. 78u-6(h)(2)(A). When an employer fires an

employee because of the employee’s internal reporting

(as respondent alleges occurred here), petitioner’s

reading of the statute thus makes liability under Section

78u-6 turn on a fact that the employer may not know.

That unusual approach would substantially diminish

Dodd-Frank’s deterrent effect. Such a result would be

especially peculiar in the context of an anti-retaliation

provision, where liability depends on an employer’s rea-

son for taking a particular employment-related action.

See, e.g., Kasten v. Saint-Gobain Performance Plastics

Corp., 563 U.S. 1, 14 (2011).

Petitioner’s reading also creates anomalies for em-

ployee whistleblowers. If two employees witness the

same fraud on the same day, report that fraud to the

same supervisor, and are fired at the same time because

of their internal disclosures, petitioner’s reading of the

statute would allow a cause of action under Section 78u-

6 only to the employee “savvy enough to know that [he]

should take the counterintuitive step of first reporting

to the SEC.” Bussing v. COR Clearing, LLC, 20 F.

Supp. 3d 719, 732-733 (D. Neb. 2014). Petitioner identi-

fies no reason that Congress would have wished to make

escalation of a concern to the federal government the

Frank—suffered retaliation because of their internal reporting ra-

ther than because of their reporting to the Commission.

only way for an employee to obtain Section 78u-

6(h)(1)(A)(@iii) protection against retaliation for internal

disclosures.

Moreover, nothing in Subsection (a)’s definition of

“whistleblower,” or in petitioner’s interpretation of the

statute, requires a temporal or topical connection be-

tween the violation reported to the Commission and the

internal disclosure for which the employee suffers re-

taliation. Thus, under petitioner’s reading, an employee

who was fired for reporting accounting fraud to his su-

pervisor in 2017 would have a cause of action under Sec-

tion 78u-6 if he had reported an insider-trading violation

by his previous employer to the Commission in 2012,

since the prior report would bring him within the statu-

tory definition of “whistleblower.”'° But an employee

fired for internally reporting the same accounting vio-

lation in 2017 without having made a prior report to the

Commission would have no such Dodd-Frank protec-

tion.”

'° Petitioner suggests (Br. 38) that, under the court of appeals’ ap-

proach, clause (iii) would provide “protection in situations having

nothing to do with violating the securities laws,” such as retaliation

against an employee for reporting a colleague’s illegal drug sales to

the FBI. But to the extent that clause (iii)’s cross-reference to 18

U.S.C. 1513(e) creates that possibility, petitioner’s interpretation of

the term “whistleblower” does not eliminate it. Rather, under peti-

tioner’s interpretation of the statute, an employee who was fired for

internally reporting drug-law violations could still invoke clause (iii)

80 long as the employee had also reported securities-related miscon-

duct to the Commission.

'! Similarly, because the statutory definition of “whistleblower” is

limited to persons who report to the Commission in the manner pre-

scribed by the Commission for the award program, 15 U.S.C. 78u-

6(a)(6), an employee fired for internally reporting an accounting vi-

olation would have a cause of action under the anti-retaliation pro-

visions if he had reported that violation to the Commission via online

Petitioner argues (Br. 13, 16) that the definitional

provision, 15 U.S.C. 78u-6(a)(6), describes “who” is pro-

tected, while clauses (i)-(iii) of the anti-retaliation pro-

visions define the “conduct” that is protected. But peti-

tioner’s approach would produce an odd disconnect be-

tween the two, since the disclosure that caused a plain-

tiff to be a “whistleblower” under the statutory defini-

tion could be wholly unrelated to the disclosure that

precipitated the alleged retaliation. Rather than di-

vorcing the definition of a protected whistleblower from

the acts of whistleblowing for which he is protected, the

anti-retaliation provisions are more naturally read to

reflect Congress’s understanding that a person who

makes any of the disclosures described in clauses (i)-(iii)

qualifies as a “whistleblower” by virtwe of those disclo-

sures.”

3. This Court can and should avoid the anomalous

consequences of petitioner’s reading by giving the term

“whistleblower” its specialized meaning in the award

provisions in Subsections (b)-(g), while applying the

“broader and more usual concept of the word” to the

anti-retaliation provisions in paragraph (h)(1). Suwan-

nee Fruit, 336 U.S. at 201; cf. Cleveland Indians, 532

U.S. at 212-216 (rejecting a “symmetrical construction”

of identical statutory language based on differences in

context). That construction would give meaning to the

form, but not if he had reported the same violation to the Commis-

sion via telephone, see 17 C.F.R. 240.21 F-9(a).

Petitioner observes (Br. 23) that the anti-retaliation provisions

in the section of Dodd-Frank establishing the Consumer Financial

Protection Bureau refer to “covered employees” rather than “whis-

tleblowers.” But as respondent explains (Br. 32), those provisions

cover a broader range of protected conduct, so “whistleblower”

would have been an unnatural term.

“words of the definitional section” throughout most of

15 U.S.C. 78u-6’s provisions, while preserving the sub-

stantive effect of a “subdivision of a subsection that uses

the defined term” in its ordinary rather than its special-

ized sense. Berman, 801 F.3d at 154; see Bussing, 20

F. Supp. 3d at 730 (“When the term ‘whistleblower’ is

given its ordinary meaning—for purposes of the retali-

ation section only—everything falls into place. The

broad protections of subsection (iii) are given effect,

while rewards under the bounty program are properly

limited to whistleblowers who provide tips to the

SEC.”). In the absence of an “iron rule” that statutory

definitions must be applied no matter how incongruous

or implausible the result—an interpretive approach this

Court has consistently rejected, see Duke Energy, 549

U.S. at 576—the court of appeals’ sensible reading of

the statutory text and structure should be affirmed.”

B. The Statutory Background and Purpose Confirm That

The Anti-Retaliation Provisions Use The Term “Whis-

tleblower” In Its Ordinary Sense

The background and purpose of Section 78u-6 sup-

port the court of appeals’ holding that the term “whis-

tleblower” in the anti-retaliation provisions should be

given its ordinary meaning.

1. Congress enacted Dodd-Frank to promote finan-

cial stability “by improving accountability and transpar-

ency in the financial system.” 124 Stat. 1376. More spe-

cifically, Congress enacted Section 78u-6 against the

'S Petitioner’s reliance (Br. 18-19) on Lamie v. United States Trus-

tee, 540 U.S. 526 (2004), is misplaced. The Court in Lamie did not

construe a statutory definition of a particular term, much less an-

nounce a categorical] rule that a definitional provision must always

control.

backdrop of Sarbanes-Oxley, in which Congress had

sought to create strong protection for internal whistle-

blowers, see Lawson, 134 8S. Ct. at 1162, but which had

not adequately protected internal whistleblowers at

places like Lehman Brothers, see p. 2, supra. The con-

ference committee reconciling the House and Senate

versions of Dodd-Frank inserted clause (iii)—which

cross-references Sarbanes-Oxley and other provisions

protecting internal whistleblowers—into the legislation

for the first time shortly after multiple members of Con-

gress had discussed the shortcomings in Sarbanes-Ox-

ley and the need for stronger whistleblower protections.

See ibid.; Pet. App. 6a."

Under those circumstances, it is “doubtful that the

conferees who accepted the last-minute insertion of

[clause] (iii) would have expected it to have the ex-

tremely limited scope it would have if it were restricted

by the Commission reporting requirement in the ‘whis-

tleblower’ definition.” Berman, 801 F.3d at 155. Ata

minimum, there is no basis to “attribute to Congress an

intent to offer a broad array of protections with one

hand, only to snatch it back with the other, leaving be-

hind protection for only a narrow subset of whistleblow-

ers.” Bussing, 20 F. Supp. 3d at 733."

'* The specialized definition of “whistleblower” first appeared in

the bill at a time when the award provisions, but not the retaliation

provisions, used the word “whistleblower.” See H.R. 3817, 111th

Cong. 2d Sess. § 203 [§ 21F(a)-(d), (f), (i)(4) and (g)(1)] (Dee. 17,

2010); H.R. 4173, 111th Cong., 2d Sess. § 7203(a) [§ 21F(a)-(d), (f),

(g)(1) and (j)(4)] (introduced in the House Dec. 2, 2009; passed by

the House Dec. 11, 2009).

'® At least one commentator has suggested that Senate Banking

Committee staff inserted clause (iii) into the draft legislation specif-

ically to protect internal whistleblowers. See Stephen Kohn, Clari-

Sying Anti-Retaliation Protections Under Dodd-Frank, Law 360,

2. Like other “securities laws combating fraud,”

Section 78u-6 should “be construed not technically and

restrictively, but flexibly to effectuate [its] remedial

purposes.” Herman & MacLean v. Huddleston, 459

U.S. 375, 386-387 (1983) (internal quotation marks omit-

ted); cf. Kasten, 563 U.S. at 11-14 (broadly construing

anti-retaliation provisions that protect employees who

“file a complaint,” to cover oral complaints in light of

“the Act’s basic objectives”); Robinson, 519 U.S. at 346

(construing anti-retaliation provisions in light of their

“primary purpose of * * * [mJaintaining unfettered ac-

cess to remedial mechanisms”).

That approach is especially appropriate given the

purpose of Section 78u-6 and the practical desirability

of encouraging internal whistleblowing as a way to pro-

mote corporate compliance. This Court has often em-

phasized the “strong tradition of professional self-

regulation.” North Carolina State Bd. of Dental Exam-

iners v. FTC, 135 S. Ct. 1101, 1115 (2015); see Republi-

can Party of Minn. v. White, 586 U.S. 765, 793 (2002)

(Kennedy, J., concurring). And numerous provisions of

federal law and policy—including but not limited to

those cross-referenced by clause (iii)—emphasize the

importance of robust corporate-compliance mecha-

nisms. See, e.g., U.S. Attorney’s Manual 9-28.300.A(7)

(2017) (considering existence and effectiveness of cor-

porate-compliance program in decision whether to pros-

ecute); Sentencing Guidelines §§ 8B2.1, 8C2.5(f) (con-

sidering corporate-compliance program in sentencing

determination).

Reading Section 78u-6’s anti-retaliation provisions to

protect internal and external whistleblowers alike

June 22, 2017, https://www.law360.com/articles/936265/clarifying-

anti-retaliation-protections-under-dodd-frank.

would “support, not undermine, the effective function-

ing of company compliance and related systems.” 76

Fed. Reg. at 34,323. During its rulemaking, the Com-

mission received numerous comments from businesses

and related associations that urged the agency to prom-

ulgate rules encouraging or requiring internal report-

ing. £.g., id. at 34,302 n.21, 34,326 n.230. The Commis-

sion agreed that internal reporting systems “are essen-

tial sources of information for companies about miscon-

duct,” and therefore “play an important role in facilitat-

ing compliance with the securities laws.” /d. at 34,323,

34,325. Among other benefits, “|s|creening allegations

through internal compliance programs may limit [mer-

itless| claims, provide the entity an opportunity to re-

solve the violation and report the result to the Commis-

sion, and allow the Commission to use its resources

more efficiently.” /d. at 34,359 n.450.

“(W )histleblower reporting through internal compli-

ance procedures can [thereby] complement or other-

wise appreciably enhance ** * enforcement efforts,”

without substituting for them. 76 Fed. Reg. at 34,359

n.450. All this faciliates efficient use of private-sector

and government resources, and effectuates Section 78u-

6’s design to prevent fraud and other securities-law vi-

olations. Reading the anti-retaliation provisions to pro-

tect only those who report to the Commission, by con-

trast, would “defeat the purpose of the legislation.”

Philko, 462 U.S. at 412. “A statutory definition should

not be applied in such a manner.” [bid.

3. Petitioner argues that giving “whistleblower” its

ordinary meaning in Section 78u-6’s anti-retaliation

provisions would render Sarbanes-Oxley “effectively

obsolete.” Pet. Br. 29; see id. at 26-30. But as noted

above, Dodd-Frank’s legislative history makes clear

that Congress viewed Sarbanes-Oxley as inadequate

and wanted to strengthen its protections. See pp. 2,

27-28 supra. The statute that Congress enacted reflects

that objective. Clause (iii) cross-references the entirety

of Sarbanes-Oxley, which necessarily (and intention-

ally) creates substantive overlap between the two stat-

utes. But the remedial provisions of Section 78u-6 differ

from those in Sarbanes-Oxley in important ways, in-

cluding through a longer statute of limitations, poten-

tially greater back pay, and no administrative-exhaus-

tion requirement. Compare 15 U.S.C. 78u-6(h)(1)(B)(i),

(ii), and (C)(iii), with 18 U.S.C. 1514A(b)(1), (c)(2)(B)

and (D).

At the same time, Section 78u-6 preserves Sarbanes-

Oxley’s remedial scheme, see 15 U.S.C. 78u-6(h)(3),

which offers its own advantages. First, under Sar-

banes-Oxley, the DOL administers initial review and in-

vestigates claims—a process that can be less costly and

stressful than federal-court litigation, particularly for

whistleblowers who lack counsel. See 18 U.S.C.

1514A(b)(2); 29 C.F.R. 1980.103-.110, 1980.114. Second,

Sarbanes-Oxley authorizes a court to award “all relief

necessary to make the employee whole,” including com-

pensation for special damages such as emotional inju-

ries. 18 U.S.C. 1514A(c)(1) and (2)(C); see also, e.g.,

Jones v. SouthPeak Interactive Corp., 777 F.3d 658, 663

(4th Cir. 2015). Third, unlike Section 78u-6, Sarbanes-

Oxley now expressly prohibits predispute arbitration

agreements, compare 18 U.S.C. 1514A(e), with, e.¢.,

Khazin v. TD Ameritrade Holding Corp., 773 F.3d 488,

493 (3d Cir. 2014), and thus could attract whistleblowers

who are subject to such agreements. From Fiscal Year

2009 (the year before Section 78u-6’s enactment) to Fis-

cal Year 2016, the annual number of Sarbanes-Oxley

complaints filed with DOL declined by less than 25%.

See DOL, Whistleblower Investigation Data F Y2006-

FY2016, _https://www.whistleblowers.gov/3DCharts-

FY2006-F Y2016.pdf. Sarbanes-Oxley thus continues to

provide whistleblowers important protections against

unlawful retaliation, even after Section 78u-6’s enact-

ment.

C. The Commission’s Reasonable Interpretation Of Sec-

tion 78u-6(h)(1) Warrants Judicial Deference

The court of appeals ruled for respondent primarily

on the ground that respondent’s reading of the statute

is correct. Pet. App. 8a. Other courts that have ruled

for whistleblowers in respondent’s position have done

the same. See, e.g., Bussing, 20 F. Supp. 3d at 733 (“the

result flows from the statute itself”). As an alternative

ground for its decision, the court of appeals found the

statute ambiguous and deferred to the Commission’s

reasonable interpretation under Chevron U/.S.A. Inc. v.

NRDC, 467 U.S. 837 (1984). Pet. App. 10a; accord Ber-

man, 801 F.3d at 155 (deferring under Chevron be-

cause, “at a minimum,” the statute is ambiguous and the

Commission’s interpretation is reasonable). That alter-

native approach would be appropriate here as well. The

Commission’s consistent, reasonable, and well-explained

formal interpretation warrants Chevron deference and

should be upheld.

1. When “a statute leaves a gap or is ambiguous,”

this Court “typically interpreti[s] it as granting the

agency leeway to enact rules that are reasonable in light

of the text, nature, and purpose of the statute.” Cuozzo

Speed Techs., LLC v. Lee, 1386 8. Ct. 2131, 2134, 2142

(2016). If the Court concludes that Dodd-Frank is am-

biguous with respect to the question presented here, the

Court should defer to the Commission’s reasonable res-

olution of that ambiguity. See Duke Energy, 549 U.S.

at 576 (deferring to “customary agency discretion to re-

solve questions about a statutory definition by looking

to the surroundings of the defined term”); Cleveland /1»-

dians, 532 U.S. at 218-220 (deferring to agency inter-

pretation of statutorily defined term to have different

meanings in different parts of statute); Robinson, 519

U.S. at 345-346 (same); cf. Kasten, 563 U.S. at 14-16 (de-

ferring to agency interpretation of ambiguity i in anti-re-

taliation provision).

The Commission promulgated Rule 21F-2, 17 C.F.R.

240.21F-2, pursuant to an express conferral of rulemak-

ing authority, 15 U.S.C. 78u-6(j), and through notice-

and-comment procedures, see 76 Fed. Reg. at 34,300.

The Commission issued the rule less than a year after

Dodd-Frank was enacted, ihid., and the agency’s inter-

pretation has not changed. The Court should accord-

ingly defer to the Commission’s interpretation as a rea-

sonable reading of the pertinent statutory language.

See United States v. Mead Corp., 533 U.S. 218, 227

(2001).

Rule 21F-2 states that, for purposes of Dodd-Frank’s

anti-retaliation provisions, “you are a whistleblower” if,

as relevant here, “[yjou provide [the relevant] infor-

mation in a manner described in” 15 U.S.C. 78u-

6(h)(1)(A). 17 C.F.R. 240.21F-2(b)(1)(ii)."" The rule thus

* In addition, by stating that “[t)he anti-retuliation protections ap-

ply whether or not you satisfy the requirements, procedures and

conditions to qualify for an award,” Rule 21F-2(b)(1) establishes

that an individual can be protected from unlawful retaliation even if

he has not reported alleged wrongdoing to the Commission, or if he

has reported it to the Commission through means other than those

required for award eligibility. 17 C.F.R. 240.21F-2(b)(1 (iii).

declares a person to be a “whistleblower” under Section

78u-6(h)(1)(A) if he makes any of the disclosures that

Section 78u-6(h)(1)(A) describes. That reading com-

ports with usual understandings of the term “whistle-

blower.” The Commission thoroughly explained that its

interpretation reflects the underlying statutory objec-

tives to provide broad protection for internal and exter-

nal whistleblowers alike, to encourage corporate man-

agers to address potential violations in the first in-

stance, and to use government enforcement resources

as efficiently as possible. 76 Fed. Reg. at 34,323-34,326.

To be sure, for purposes of Section 78u-6(h)(1)’s anti-

retaliation provisions, Rule 21F-2 treats as “whistle-

blowers” some individuals who do not fall within Section

78u-6(a)(6)’s definition of that term. Under this Court’s

precedents, however, the Commission was not categor-

ically required to apply that definition in construing

every Dodd-Frank provision in which the word “whis-

tleblower” appears. See pp. 17-18, supra. Based on the

ordinary meaning of the statutory text and various con-

textual clues, considered in light of the Commission’s

securities-law expertise, the Commission determined

that, although the statutory definition should contro!

the interpretation of Dodd-F rank’s award provisions, it

was ill-suited to the anti-retaliation provisions. That

reasonable interpretation is entitled to deference. Pet.

App. 10a; Berman, 801 F.3d at 155.

2. Petitioner challenges, for the first time, the pro-

cedural validity of the Commission’s regulation. Pet.

Br. 6-7, 41-45. Petitioner contends that the notice of

proposed rulemaking did not adequately alert inter-

ested parties that the Commission was contemplating

the course it ultimately took, and that the Commission

in announcing Rule 21F-2 did not adequately explain its

decision to depart from the statutory definition of

“whistleblower.” Those challenges are not properly be-

fore this Court because they were not pressed or passed

on in either of the courts below, see Lewis v. Clarke, 137

S. Ct. 1285, 1292 n.2 (2017); see also McLane Co. v.

EEOC, 187 8S. Ct. 1159, 1170 (2017) (this Court is “a

court of review, not of first view”) (citation omitted), and

because they were “not presented in the petition for

certiorari,” Jerman v. Carlisle, McNellie, Rini, Kra-

mer & Ulrich, L.P.A., 559 U.S. 578, 580 n.3 (2010).

In any event, petitioner’s procedural challenges are

unfounded. The notice of proposed rulemaking pro-

vided ample notice of the Commission’s interest in re-

ceiving public comment on appropriate measures to

protect and promote internal whistleblowing, including

through the anti-retaliation provisions."’ It was there-

fore “reasonably foreseeable” that the Commission

would interpret the anti-retaliation provisions to pro-

tect internal whistleblowing. Long Island Care at

Home, Ltd. v. Coke, 551 U.S. 158, 175 (2007). And the

adopting release’s multi-page analysis and comment ci-

tations fully explained the regulation’s consistency with

the statute."* See ibid. (finding less-developed explana-

tion sufficient).

‘t See 75 Fed. Reg. 70,488, 70,495, 70,511 & q.42 (Nov. 17, 2010)

(soliciting comment on whether and how to promulgate rules inter-

preting Section 78u-6(h)(1); whether to adopt a “broadened” appli-

cation of Section 78u-6(h)(1); and whether other proposed rules

“provide sufficient incentives” to use internal compliance processes

or whether to adopt further rules to “promote effective self-policing

and self-reporting ... consistent with [Section 21F’s] goals and

text”).

'§ See 76 Fed. Reg. at 34,302-34,304 & nn.21, 23, 37-39; id. at 34,317

n.149; id. at 34,323-34,327, n.207, 230; id. at 34,359-34,362 & nn.449-

CONCLUSION

The judgment of the court of appeals should be af-

firmed.

Respectfully submitted.

ROBERT B,. STEBBINS NOEL J. FRANCISCO

General Counsel Solicitor General

MICHAEL A. CONLEY MALCOLM L. STEWART

Solicitor Deputy Solicitor General

THOMAS J. KARR CHRISTOPHER G. MICHEL

Assistant to the Solicitor

Assistant General Counsel

General

STEPHEN G. YODER

Senior Litigation Counsel

DINA B, MISHRA

Attorney

Securities And Exchange

Commission

OCTOBER 2017

450 (analyzing “[s]pecifically” how clause (iii) “incorporate|s]” stat-

utory disclosures to non-Commission recipients and does not make

protection from job-related retaliation contingent on eligibility for

an award; and discussing, and citing comment letters on, the impor-

tance of preserving internal compliance reporting despite award in-

centives for reporting to the Commission).

APPENDIX

1. 15 U.S.C. 78u-6 provides:

Securities whistleblower incentives and protection

(a) Definitions

In this section the following definitions shall apply:

(1) Covered judicial or administrative action

The term “covered judicial or administrative action”

means any judicial or administrative action brought by

the Commission under the securities laws that results

in monetary sanctions exceeding $1,000,000.

(2) Fund

The term “Fund” means the Securities and Ex-

change Commission Investor Protection Fund.

(3) Original information

The term “original information” means information

that—

(A) is derived from the independent knowledge

or analysis of a whistleblower;

(B) is not known to the Commission from any

other source, unless the whistleblower is the original

source of the information; and

tion made in a judicial or administrative hearing, in

a governmental report, hearing, audit, or investiga-

tion, or from the news media, unless the whistle-

blower is a source of the information.

(la)

(4) Monetary sanctions

The term “monetary sanctions”, when used with re-

spect to any judicial or administrative action, means—

(A) any monies, including penalties, disgorge-

ment, and interest, ordered to be paid; and

(B) any monies deposited into a disgorgement

fund or other fund pursuant to section 308(b) of the

Sarbanes-Oxley Act of 2002 (15 U.S.C. 7246(b)), as a

result of such action or any settlement of such ac-

tion.

(5) Related action

The term “related action”, when used with respect

to any judicial or administrative action brought by the

Commission under the securities laws, means any judi-

cial or administrative action brought by an entity de-

scribed in subclauses (1) through (IV) of subsection

(h)(2)(D)(i) that is based upon the original information

provided by a whistleblower pursuant to subsection (a)

that led to the successful enforcement of the Commis-

sion action.

(6) Whistleblower

The term “whistleblower” means any individual who

provides, or 2 or more individuals acting jointly who

provide, information relating to a violation of the secu-

rities laws to the Commission, in a manner established,

by rule or regulation, by the Commission.

(b) Awards

(1) In general

In any covered judicial or administrative action,

or related action, the Commission, under regula-

tions prescribed by the Commission and subject to

subsection (c), shall pay an award or awards to 1 or

more whistleblowers who voluntarily provided orig-

inal information to the Commission that led to the

successful enforcement of the covered judicial or

administrative action, or related action, in an ag-

gregate amount equal to—

(A) not less than 10 percent, in total, of what

has been collected of the monetary sanctions im-

posed in the action or related actions; and

(B) not more than 30 percent, in total, of

what has been collected of the monetary sanc-

tions imposed in the action or related actions.

(2) Payment of awards

Any amount paid under paragraph (1) shall be

paid from the Fund.

(1) Determination of amount of award

(A) Discretion

The determination of the amount of an award

made under subsection (b) shall be in the discre-

tion of the Commission.

(B) Criteria

In determining the amount of an award made

under subsection (b), the Commission—

(i) shall take into consideration—

(I) the significance of the information

provided by the whistleblower to the suc-

cess of the covered judicial or administra-

tive action;

(II) the degree of assistance provided

by the whistleblower and any legal repre-

sentative of the whistleblower in a covered

judicial or administrative action;

({II) the programmatic interest of the

Commission in deterring violations of the

securities laws by making awards to whis-

tleblowers who provide information that

lead to the successful enforcement of such

laws; and

(TV) such additional relevant factors as

the Commission may establish by rule or

regulation; and

(ii) shall not take into consideration the

balance of the Fund.

(2) Denial of award

No award under subsection (b) shall be made—

(A) to any whistleblower who is, or was at the

time the whistleblower acquired the original] in-

formation submitted to the Commission, a mem-

ber, officer, or employee of—

(i) an appropriate regulatory agency;

(ii) the Department of Justice;

(iii) a self-regulatory organization;

(iv) the Public Company Accounting Over-

sight Board; or

(v) alaw enforcement organization;

(B) to any whistleblower who is convicted of a

criminal violation related to the judicial or ad-

ministrative action for which the whistleblower

otherwise could receive an award under this sec-

tion;

formation through the performance of an audit of

financial statements required under the securi-

ties laws and for whom such submission would be

contrary to the requirements of section 78j-1 of

this title; or

(D) to any whistleblower who fails to submit

information to the Commission in such form as

the Commission may, by rule, require.

(d) Representation

(1) Permitted representation

Any whistleblower who makes a claim for an

award under subsection (b) may be represented by

counsel.

(2) Required representation

(A) In general

Any whistleblower who anonymously makes a

claim for an award under subsection (b) shall be

represented by counsel if the whistleblower ano-

nymously submits the information upon which

the claim is based.

(B) Disclosure of identity

Prior to the payment of an award, a whistle-

blower shall disclose the identity of the whistle-

blower and provide such other information as the

Commission may require, directly or through

counsel for the whistleblower.

(e) No-ontract necessary

No contract with the Commission is necessary for

any whistleblower to receive an award under subsec-

tion (b), unless otherwise required by the Commission

by rule or regulation.

(f) Appeals

Any determination made under this section, includ-

ing whether, to whom, or in what amount to make

awards, shall be in the discretion of the Commission.

Any such determination, except the determination of

the amount of an award if the award was made in ac-

cordance with subsection (b), may be appealed to the

appropriate court of appeals of the United States not

more than 30 days after the determination is issued by

the Commission. The court shall review the determi-

nation made by the Commission in accordance with

section 706 of title 5.

(g) Investor Protection Fund

(1) Fund established

There is established in the Treasury of the

United States a fund to be known as the “Securities

and Exchange Commissivn Investor Protection

Fund”.

(2) Use of Fund

The Fund shall be available to the Commission,

without further appropriation or fiscal year limita-

tion, for—

(A) paying awards to whistleblowers as

provided in subsection (b); and

(B) funding the activities of the Inspector

General of the Commission under section 78d(i)

of this title.

(3) Deposits and credits

(A) In general

There shall be deposited into or credited to

the Fund an amount equal to—

(i) any monetary sanction collected by

the Commission in any judicial or administra-

tive action breught by the Commission under

the securities laws that is not added to a dis-

gorgement fund or other fund under section

308 of the Sarbanes-Oxley Act of 2002

(15 U.S.C. 7246) or otherwise distributed to

victims of a violation of the securities laws, or

the rules and regulations thereunder, under-

lying such action, unless the balance of the

Fund at the time the monetary sanction is

collected exceeds $300,000,000;

(ii) any monetary sanction added to a dis-

gorgement fund or other fund under section

308 of the Sarbanes-Oxley Act of 2002

(15 U.S.C. 7246) that is not distributed to the

victims for whom the Fund was established,

unless the balance of the disgorgement fund

at the time the determination is made not to

distribute the monetary sanction to such vic-

tims exceeds $200,000,000; and

(iii) all income from investments made

under paragraph (4).

(B) Additional amounts

If the amounts deposited into or credited to

the Fund under subparagraph (A) are not suffi-

cient to satisfy an award made under subsection

(b), there shall be deposited into or credited to

the Fund an amount equal to the unsatisfied por-

tion of the award from any monetary sanction

collected by the Commission in the covered judi-

cial or administrative action on which the award

is based.

(4)

(5)

Investments

(A) Amounts in Fund may be invested

The Commission may request the Secretary of

the Treasury to invest the portion of the Fund

that is not, in the discretion of the Commission,

required to meet the current needs of the Fund.

(B) Eligible investments

Investments shall be made by the Secretary of

the Treasury in obligations of the United States

or obligations that are guaranteed as to principal

and interest by the United States, with maturi-

ties suitable to the needs of the Fund as deter-

mined by the Commission on the record.

The interest on, and the proceeds from the sale

or redemption of, any obligations held in the

Fund shall be credited to the Fund.

Reports to Congress

Not later than October 30 of each fiscal year be-

ginning after July 21, 2010, the Commission shall

submit to the Committee on Banking, Housing, and

Urban Affairs of the Senate, and the Committee on

Financial Services of the House of Representatives

a report on—

(A) the whistleblower award program, es-

tablished under this section, including—

(i) adescription of the number of awards

granted; and

10a

(ii) the types of cases in which awards

were granted during the preceding fiscal

year;

(B) the balance of the Fund at the begin-

ning of the preceding fiscal year;

to the Fund during the preceding fiscal year;

(D) the amount of earnings on investments

made under paragraph (4) during the preceding

fiscal year;

(E) the amount paid from the Fund during

the preceding fiscal year to whistleblowers pur-

suant to subsection (b);

(F) the balance of the Fund at the end of the

preceding fiscal year; and

(G) a complete set of audited financial

statements, including—

(i) a balance sheet;

(ii) income statement; and

(iii) cash flow analysis.

(h) Protection of whistleblowers

(1) Prohibition against retaliation

(A) In general

No employer may discharge, demote, sus-

pend, threaten, harass, directly or indirectly, or

in any other manner discriminate against, a whis-

tleblower in the terms and conditions of employ-

lla

ment because of any lawful act done by the whis-

tleblower—

(i) in providing information to the Com-

mission in accordance with this section;

(ii) in initiating, testifying in, or assisting

in any investigation or judicial or administra-

tive action of the Commission based upon or

related to such information; or

(iii) in making disclosures that are re-

quired or protected under the Sarbanes-Oxley

Act of 2002 (15 U.S.C. 7201 et seq.), this

chapter, including section 78j-l(m) of this title,

section 1513(e) of title 18, and any other law,

rule, or regulation subject to the jurisdiction

of the Commission.

(B) Enforcement

(i) Cause of action

An individual who alleges discharge or

other discrimination in violation of subpara-

graph (A) may bring an action under this

subsection in the appropriate district court of

the United States for the relief provided in

subparagraph (C).

(ii) Subpoenas

A subpoena requiring the attendance of a

witness at a trial or hearing conducted under

this section may be served at any place in the

United States.

12a

(iii) Statute of limitations

(I) In general

An action under this subsection may not

be brought—

(aa) more than 6 years after the

date on which the violation of subpara-

graph (A) occurred; or

(bb) more than 3 years after the

date when facts material to the right of

action are known or reasonably should

have been known by the employee al-

leging a violation of subparagraph (A).

(II) Required action within 10 years

Notwithstanding subclause (1), an action

under this subsection may not in any cir-

cumstance be brought more than 10 years

after the date on which the violation occurs.

Relief for an individuai prevailing in an action

brought under subparagraph (B) shall include—

(i) reinstatement with the same seniority

status that the individual would have had, but

for the discrimination;

(ii) 2 times the amount of back pay other-

wise owed to the individual, with interest; and

(iii) compensation for litigation costs, ex-

pert witness fees, and reasonable attorneys’

fees.

(2)

13a

Confidentiality

(A) In general

Except as provided in subparagraphs (B) and

(C), the Commission and any officer or employee

of the Commission shall not disclose any infor-

mation, including information provided by a

whistleblower to the Commission, which could

reasonably be expected to reveal the identity of a

whistleblower, except in accordance with the

provisions of section 552a of title 5, unless and

until required to be disclosed to a defendant or

respondent in connection with a public proceed-

ing instituted by the Commission or any entity

described in subparagraph (C). For purposes of

section 552 of title 5, this paragraph shall be con-

sidered a statute described in subsection

(b)(3)(B) of such section.

(B) Exempted statute

For purposes of section 552 of title 5, this

paragraph shall be considered a statute de-

scribed in subsection (b)(3)(B) of such section

552.

Nothing in this section is intended to limit, or

shall be construed to limit, the ability of the At-

torney General to present such evidence to a

grand jury or to share such evidence with poten-

tial witnesses or defendants in the course of an

ongoing criminal investigation.

l4a

(D) Availability to government agencies

(i) In general

Without the loss of its status as confiden-

tial in the hands of the Commission, all infor-

mation referred to in subparagraph (A) may,

in the discretion of the Commission, when de-

termined by the Commission to be necessary

to accomplish the purposes of this chapter and

to protect investors, be made available to—

({) the Attorney General of the

United States;

(Il) an appropriate regulatory au-

thority;

(III) a self-regulatory organization;

(IV) a State attorney general in con-

nection with any criminal investigation;

(V) any appropriate State regula-

tory authority;

(VI) the Public Company Accounting

Oversight Board;

(VII) a foreign securities authority;

and

(VIII) a foreign law enforcement au-

thority.

15a

(ii) Confidentiality

(I) In general

Each of the entities described in sub-

clauses (I) through (VI) of clause (i) shall

maintain such information as confidential in

accordance with the requirements estab-

lished under subparagraph (A).

(II) Foreign authorities

Each of the entities described in sub-

clauses (VII) and (VIII) of clause (i) shall

maintain such information in accordance

with such assurances of confidentiality as

the Commission determin 2s appropriate.

(3) Rights retained

Nothing in this section shall be deemed to di-

minish the rights, privileges, or remedies of any

whistleblower under any Federal or State law, or

under any collective bargaining agreement.

(i) Provision of false information

A whistleblower shall not be entitled to an award

under this section if the whistleblower—

(1) knowingly and willfully makes any false,

fictitious, or fraudulent statement or representation;

(2) uses any false writing or document knowing

the writing or document contains any false, ficti-

tious, or fraudulent statement or entry.

l6a

(j) Rulemaking authority

The Commission shall have the authority to issue

such rules and regulations as may be necessary or

appropriate to implement the provisions of this section

consistent with the purposes of this section.

2. 180U.S.C. 1514A provides:

Civil action to protect against retaliation in fraud cases

(a) WHISTLEBLOWER PROTECTION FOR EMPLOY-

EES OF PUBLICLY TRADED COMPANIES.—No company

with a class of securities registered under section 12 of

the Securities Exchange Act of 1934 (15 U.S.C. 781), or

that is required to file reports under section 15(d) of

the Securities Exchange Act of 1934 (15 U.S.C. 780(d))

including any subsidiary or affiliate whose financial

information is included in the consolidated financial

statements of such company, or nationally recognized

statistical rating organization (as defined in section 3(a)

of the Securities Exchange Act of 1934 (15 U.S.C. 78¢),'

or any officer, employee, contractor, subcontractor, or

agent of such company or nationally recognized statis-

tical rating organization, may discharge, demote, sus-

pend, threaten, harass, or in any other manner discrim-

inate against an employee in the terms and conditions

of employment because of any lawful act done by the

employee—

' So in original. Another closing parenthesis probably should

precede the comma.

17a

(1) to provide information, cause information to

be provided, or otherwise assist in an investigation

regarding any conduct which the employee reasona-

bly believes constitutes a violation of section 1341,

1348, 1344, or 1348, any rule or regulation of the

Securities and Exchange Commission, or any provi-

sion of Federal law relating to fraud against share-

holders, when the information or assistance is pro-

vided to or the investigation is conducted by—

(A) a Federal regulatory or law enforcement

agency;

(B) any Member of Congress or any commit-

tee of Congress; or

the employee (or such other person working for

the employer who has the authority to investi-

gate, discover, or terminate misconduct); or

(2) to file, cause to be filed, testify, participate

in, or otherwise assist in a proceeding filed or about

to be filed (with any knowledge of the employer) re-

lating to an alleged violation of section 1341, 1343,

1344, or 1348, any rule or regulation of the Securi-

ties and Exchange Commission, or any provision of

Federal law relating to fraud against shareholders.

(b) ENFORCEMENT ACTION,—

(1) IN GENERAL.—A person who alleges dis-

charge or other discrimination by any person in vi-

olation of subsection (a) may seek relief under sub-

section (c), by—

18a

(A) filing a complaint with the Secretary of

Labor; or

(B) if the Secretary has not issued a final de-

cision within 180 days of the filing of the com-

plaint and there is no showing that such delay is

due to the bad faith of the claimant, bringing an

action at law or equity for de novo review in the

appropriate district court of the United States,

which shall have jurisdiction over such an action

without regard to the amount in controversy.

(2) PROCEDURE.—

(A) IN GENERAL.—An action under para-

graph (1)(A) shall be governed under the rules

and procedures set forth in section 42121(b) of ti-

tle 49, United States Code.

(B) EXCEPTION.—Notification made under

section 42121(b)(1) of title 49, United States

Code, shall be made to the person named in the

complaint and to the employer.

under paragraph (1)(B) shall be governed by the

legal burdens of proof set forth in section

42121(b) of title 49, United States Code.

(D) STATUTE OF LIMITATIONS.—An action

under paragraph (1) shall be commenced not lat-

er than 180 days after the date on which the vio-

lation occurs, or after the date on which the em-

ployee became aware of the violation.

19a

(E) JURY TRIAL.—A party to an action

brought under paragraph (1)(B) shall be entitled

to trial by jury.

(ec) REMEDIES.—

(1) IN GENERAL.—An employee prevailing in

any action under subsection (b)(1) shall be entitled

to all relief necessary to make the employee whole.

(2) COMPENSATORY DAMAGES.—Relief for any

action under paragraph (1) shall include—

(A) reinstatement with the same seniority

status that the employee would have had, but for

the discrimination;

(B) the amount of back pay, with interest; and

sustained as a result of the discrimination, in-

cluding litigation costs, expert witness fees, and

reasonable attorney fees.

(d) RIGHTS RETAINED BY EMPLOYEE.—Nothing in

this section shall be deemed to diminish the rights,

privileges, or remedies of any employee under any

Federal or State law, or under any collective bargain-

ing agreement.

(e) NONENFORCEABILITY OF CERTAIN PROVISIONS

WAIVING RIGHTS AND REMEDIES OR REQUIRING AR-

BITRATION OF DISPUTES.—

(1) WAIVER OF RIGHTS AND REMEDIES.—The

rights and remedies provided for in this section may

not be waived by any agreement, policy form, or

20a

condition of employment, including by a predispute

arbitration agreement.

(2) PREDISPUTE ARBITRATION AGREEMENTS.—

No predispute arbitration agreement shall be valid

or enforceable, if the agreement requires arbitration

of a dispute arising under this section.

3. 15 U.S.C. 78j-1 provides in pertinent part:

Audit requirements

* * * * >

(b) Required response to audit discoveries

(1) Investigation and report to management

If, in the course of conducting an audit pursuant

to this chapter to which subsection (a) of this section

applies, the registered public accounting firm de-

tects or otherwise becomes aware of information in-

dicating that an illeg» act (whether or not perceived

to have a material eftect on the financial statements

of the issuer) has or may have occurred, the firm

shall, in accordance with generally accepted auditing

standards, as may be modified or supplemented

from time to time by the Commission—

(A)(i) determine whether it is likely that an il-

legal act has occurred; and

(ii) ifso, determine and consider the possible

effect of the illegal act on the financial statements

of the issuer, including any contingent monetary

Zla

effects, such as fines, penalties, and damages;

and

(B) as soon as practicable, inform the appro-

priate level of the management of the issuer and

assure that the audit committee of the issuer, or

the board of directors of the issuer in the absence

of such a committee, is adequately informed with

respect to illegal acts that have been detected or

have otherwise come to the attention of such firm

in the course of the audit, unless the illegal act is

clearly inconsequential.

(2) Response to failure to take remedial action

If, after determining that the audit committee of

the board of directors of the issuer, or the board of

directors of the issuer in the absence of an audit

committee, is adequately informed with respect to

illegal acts that have been detected or have other-

wise come to the attention of the firm in the course

of the audit of such firm, the registered public ac-

counting firm concludes that—

(A) the illegal act has a material effect on the

financial statements of the issuer;

(B) the senior management has not taken,

and the board of directors has not caused senior

management to take, timely and appropriate re-

medial actions with respect to the illegal act; and

sonably expected to warrant departure from a

standard report of the auditor, when made, or

warrant resignation from the audit engagement;

22a

the registered public accounting firm shall, as soon

as practicable, directly report its conclusions to the

board of directors.

(3) Notice to Commission; response to failure to

notify

An issuer whose board of directors receives a

report under paragraph (2) shall inform the Com-

mission by notice not later than 1 business day after

the receipt of such report and shall furnish the reg-

istered public accounting firm making such report

with a copy of the notice furnished to the Commis-

sion. If the registered public accounting firm fails

to receive a copy of the notice before the expiration

of the required 1-business-day period, the regis-

tered public accounting firm sha]l—

(A) resign from the engagement; or

(B) furnish to the Commission a copy of its

report (or the documentation of any oral report

given) not later than 1 business day following

such failure to receive notice.

(4) Report after resignation

If a registered public accounting firm resigns

from an engagement under paragraph (3)(A), the

firm shall, not later than 1 business day following

the failure by the issuer to notify the Commission

under paragraph (3), furnish to the Commission a

copy of the report of the firm (or the documentation

of any oral report given).

# + * * -

23a

(m) Standards relating to audit committees

(1) Commission rules

(A) In general

Effective not later than 270 days after July

30, 2002, the Commission shall, by rule, direct the

national securities exchanges and national secu-

rities associations to prohibit the listing of any

security of an issuer that is not in compliance

with the requirements of any portion of para-

graphs (2) through (6).

(B) Opportunity to cure defects

The rules of the Commission under subpara-

graph (A) shall provide for appropriate proce-

dures for an issuer to have an opportunity to cure

any defects that would be the basis for a prohibi-

tion under subparagraph (A), before the imposi-

tion of such prohibition.

(2) Responsibilities relating to registered public

accounting firms

The audit committee of each issuer, in its capac-

ity as a committee of the board of directors, shall be

directly responsible for the appointment, compensa-

tion, and oversight of the work of any registered

public accounting firm employed by that issuer (in-

cluding resolution of disagreements between man-

agement and the auditor regarding financial re-

porting) for the purpose of preparing or issuing an

audit report or related work, and each such regis-

tered public accounting firm shall report directly to

the audit committee.

24a

(3) Independence

(A) In general

Each member of the audit committee of the

issuer shall be a member of the board of directors

of the issuer, and shall otherwise be independent.

(B) Criteria

In order to be considered to be independent

for purposes of this paragraph, a member of an

audit committee of an issuer may not, other than

in his or her capacity as a member of the audit

committee, the board of directors, or any other

board committee—

(i) accept any consulting, advisory, or

other compensatory fee from the issuer; or

(ii) be an affiliated person of the issuer or

any subsidiary thereof.

The Commission may exempt from the re-

quirements of subparagraph (B) a particular re-

lationship with respect to audit committee mem-

bers, as the Commission determines appropriate

in light of the circumstances.

Complaints

Each audit committee shall establish procedures

for—

(A) the receipt, retention, and treatment of

complaints received by the issuer regarding ac-

25a

counting, internal accounting controls, or audit-

ing matters; and

(B) the confidential, anonymous submission

by employees of the issuer of concerns regarding

questionable accounting or auditing matters.

(5) Authority to engage advisers

Each audit committee shall have the authority to

engage independent counsel and other advisers, as it

determines necessary to carry out its duties.

(6) Funding

Each issuer shall provide for appropriate fund-

ing, as determined by the audit committee, in its

capacity as a committee of the board of directors, for

payment of compensation—

(A) to the registered public accounting firm

employed by the issuer for the purpose of ren-

dering or issuing an audit report; and

(B) to any advisers employed by the audit

committee under paragraph (5).

4. 15 U.S.C. 7245 provides:

Rules of professional responsibility for attorneys

Not later than 180 days after July 30, 2002, the

Commission shall issue rules, in the public interest and

for the protection of investors, setting forth minimum

standards of professional conduct for attorneys ap-

pearing and practicing before the Commission in any

way in the representation of issuers, including a rule—

26a

(1) requiring an attorney to report evidence of

a material violation of securities law or breach of fi-

duciary duty or similar violation by the company or

any agent thereof, to the chief legal counsel or the

chief executive officer of the company (or the equiv-

alent thereof); and

(2) if the counsel or officer does not appropri-

ately respond to the evidence (adopting, as neces-

sary, appropriate remedial measures or sanctions

with respect to the violation), requiring the attorney

to report the evidence to the audit committee of the

board of directors of the issuer or to another com-

mittee of the board of directors comprised solely of

directors not employed directly or indirectly by the

issuer, or to the board of directors.

5. 18 U.S.C. 1513(e) provides:

Retaliating against a witness, victim, or an informant

(e) Whoever knowingly, with the intent to retaliate,

takes any action harmful to any person, including in-

terference with the lawful employment or livelihood of

any person, for providing to a law enforcement officer

any truthful information relating to the commission or

possible commission of any Federal offense, shall be

fined under this title or imprisoned not more than 10

years, or both.

27a

6. 17 C.F.R. 240.21F-2 provides:

Whistleblower status and retaliation protection.

(a) Definition of a whistleblower. (1) You are a

whistleblower if, alone or jointly with others, you pro-

vide the Commission with information pursuant to the

procedures set forth in § 240.21F-9(a) of this chapter,

and the information relates to a possible violation of the

Federal securities laws (including any rules or regula-

tions thereunder) that has occurred, is ongoing, or is

about to occur. A whistleblower must be an individu-

al. A company or another entity is not eligible to be a

whistleblower.

(2) To be eligible for an award, you must submit

original information to the Commission in accordance

with the procedures and conditions described in

§§240.21F-4, 240.21F-8, and 240.21F-9 of this chapter.

(b) Prohibition against retaliation. (1) For pur-

poses of the anti-retaliation protections afforded by

Section 21F(h)(1) of the Exchange Act (15 U.S.C.

78u-6(h)(1)), you are a whistleblower if:

(i) You possess a reasonable belief that the infor-

mation you are providing relates to a possible securi-

ties law violation (or, where applicable, to a possible

violation of the provisions set forth in 18 U.S.C.

1514A(a)) that has occurred, is ongoing, or is about to

occur, and;

(ii) You provide that information in a manner

described in Section 21F(h)(1)(A) of the Exchange Act

(15 U.S.C. 78u-6(h)(1)(A)).

28a

(iii) The anti-retaliation protections apply whether

or not you satisfy the requirements, procedures and

conditions to qualify for an award.

(2) Section 21F(h)(1) of the Exchange Act

(15 U.S.C. 78u-6(h)(1)), including any rules promulgat-

ed thereunder, shall be enforceable in an action or

proceeding brought by the Commission.

7. 17C.F.R. 240.21F-9 provides:

Procedures for submitting original information.

(a) To be considered a whistleblower under Section

21F of the Exchange Act (15 U.S.C. 78u-6(h)), you must

submit your information about a possible securities law

violation by either of these methods:

(1) Online, through the Commission’s Web site lo-

cated at http://www.sec.gov; or

(2) By mailing or faxing a Form TCR (Tip, Com-

plaint or Referral) (referenced in §249.1800 of this

chapter) to the SEC Office of the Whistleblower, 100 F

Street NE., Washington, DC 20549-5631, Fax (703)

813-9322.

(b) Further, to be eligible for an award, you must

declare under penalty of perjury at the time you submit

your information pursuant to paragraph (a)(1) or (2) of

this section that your information is true and correct to

the best of your knowledge and belief.

section, if you are providing your original information

to the Commission anonymously, then your attorney

29a

must submit your information on your behalf pursuant

to the procedures specified in paragraph (a) of this

section. Prior to your attorney’s submission, you

must provide your attorney with a completed Form

TCR (referenced in §249.1800 of this chapter) that you

have signed under penalty of perjury. When your

attorney makes her submission on your behalf, your

attorney will be required to certify that he or she:

(1) Has verified your identity;

(2) Has reviewed your completed and signed Form

TCR (referenced in §249.1800 of this chapter) for com-

pleteness 2nd accuracy and that the information con-

tained therein is true, correct and complete to the best

of the attorney’s knowledge, information and belief;

(3) Has obtained your non-waivable consent to

provide the Commission with your original completed

and signed Form TCR (referenced in §249.1800 of this

chapter) in the event that the Commission requests it

due to concerns that you may have knowingly and will-

fully made false, fictitious, or fraudulent statements or

representations, or used any false writing or document

knowing that the writing or document contains any

false fictitious or fraudulent statement or entry; and

(4) Consents to be legally obligated to provide the

signed Form TCR (referenced in § 249.1800 of this

chapter) within seven (7) calendar days of receiving

such request from the Commission.

(d) If you submitted original information in writing

to the Commission after July 21, 2010 (the date of en-

actment of the Dodd-Frank Wall Street Reform and

Consumer Protection Act) but before the effective date

30a

of these rules, your submission will be deemed to sat-

isfy the requirements set forth in paragraphs (a) and

(b) of this section. If you were an anonymous whistle-

blower, however, you must provice your attorney with

a completed and signed copy of Form TCR (referenced

in §249.1800 of this chapter) within 60 days of the et-

fective date of these rules, your attorney must retain

the signed form in his or her records, and you must

provide of copy of the signed form to the Commission

staff upon request by Commission staff prior to any

payment of an award to you in connection with your

submission. Notwithstanding the foregoing, you must

follow the procedures and conditions for making a

claim for a whistleblower award described in

$$ 240.21F-10 and 240.21F-11 of this chapter.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.