![]() ![]() ” 24 Finally, Judge Pauley noted a judicial split over whether Liu could be considered a “whistleblower” at all under Dodd-Frank even if his reporting were covered by SOX 25: the antiretaliation provision defines “whistleblower” as “any individual who provides . . . information relating to a violation of the securities laws to the. 21 His behavior was not - as Liu alleged 22 - “required or protected under the Sarbanes-Oxley Act of 2002” 23 (SOX), nor under “any other law, rule, or regulation subject to the jurisdiction of the. 20 Second, the court held that, regardless of its extraterritoriality, Liu’s reporting of alleged FCPA violations did not fall within any of the forms of whistleblower activity protected by Dodd-Frank. 19 and reasoned that, given this presumption, the antiretaliation provision’s “silence” on foreign applicability meant that it must be confined to domestic concerns. 17 First, Judge Pauley cited the “presumption against extraterritoriality” 18 expounded by the Supreme Court in Morrison v. The district court dismissed Liu’s suit on two alternative grounds. 15 Soon after his termination, Liu alerted the SEC to the possible FCPA violations and sued Siemens in the Southern District of New York, alleging that Siemens had violated Dodd-Frank’s antiretaliation provision by firing him in response to his internal reporting. 14 Siemens was unreceptive to Liu’s concerns as he continued to press his supervisors, the company restricted his responsibilities and eventually fired him. 13 Liu believed that the company was inflating its bids when selling medical devices to Chinese and North Korean hospitals and paying kickbacks to officials who accepted those bids. 11 Beginning in October 2009, Liu used Siemens’s internal procedures to report what he suspected were inadequate bribery prevention measures under the Foreign Corrupt Practices Act of 1977 12 (FCPA). Taiwanese citizen and resident Liu Meng-Lin was hired in 2008 as a healthcare compliance officer for Siemens China, a subsidiary of the German corporation Siemens AG. ![]() As a matter of statutory interpretation, future courts should defer to the SEC’s interpretation that the ambiguous provision protects both internal and external reporting. ![]() 8 But by deciding the case on that issue alone, 9 the court left open the other salient question: whether Dodd-Frank covers employees as “whistleblowers” if they report violations only internally. Affirming the dismissal of a suit brought by an overseas employee against a foreign employer, the Second Circuit held that “the antiretaliation provision does not apply extraterritorially.” 6 The court’s resolution of the Act’s geographic scope was an unsurprising application of the presumption against extraterritoriality 7 elaborated in recent Supreme Court decisions. Siemens AG, 5 the Second Circuit resolved the first of these interpretive questions and declined to address the second. 2 Since the Act’s passage, courts have faced, inter alia, two issues of statutory interpretation central to the scope of the antiretaliation provision: first, the degree to which it applies extraterritorially to foreign employers and their conduct abroad, 3 and second, whether it protects employees who report violations internally to their employers and not externally to the Securities and Exchange Commission (SEC). Passed in the wake of the 2008 financial crisis, the Dodd-Frank Wall Street Reform and Consumer Protection Act 1 includes an antiretaliation provision intended to protect employees who report violations of antifraud and securities laws from being fired or sanctioned by their employers. ![]()
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