Protecting Whistleblower Protections in the Dodd-Frank Act

In 2008, the United States fell into its worst economic recession in over seventy years. In response, Congress enacted the near-comprehensive Dodd-Frank Wall Street Reform and Consumer Protection Act. Section 922 of Dodd-Frank, in particular, includes specific provisions designed to incentivize and protect corporate whistleblowers. These provisions demonstrated Congress's belief that a comprehensive and robust whistleblower protection scheme was essential to preventing many of the abuses that caused the financial crisis. Unfortunately, this section's inconsistent language has produced conflicting decisions within the federal judiciary. In accordance with the Securities and Exchange Commission ("SEC")'s own reading of Section 922, several district courts have held that individuals engaging in "whistleblower activities" are entitled to Dodd-Frank's antiretaliation protections, irrespective of whether these individuals report directly to the SEC or report through internal channels in their own companies. In contrast, the U.S. Court of Appeals for the Fifth Circuit has limited Dodd-Frank's whistleblowing protections to individuals who report directly to the SEC. This Note contends that remedial legislation like Dodd-Frank should be broadly interpreted to further its purpose, that a broad interpretation of Section 922 is consistent with the text, structure, and legislative history of Dodd-Frank, and that courts unable to resolve the apparent conflict in this section should defer to the SEC's administrative expertise and interpretation.IntroductionWhen the United States' housing market collapsed in 2008, it sent the country into its worst financial state since the Great Depression. Academics, politicians, and the media have suggested various causes of and potential remedies for the collapse. But while many of the causes and remedies for this particular recession may be novel, the general pattern of a financial collapse followed by increased financial regulations is quite familiar. The United States has suffered many severe financial setbacks in the last century, and each time the federal government's response has included some form of pro- posed regulatory solution: the introduction of the Securities Exchange Act of 1934 following the Great Depression;1 the enactment of the Sarbanes-Oxley Act of 2002 ("SOX") following the collapses of Enron, WorldCom, and sev- eral other prominent corporations;2 and the implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank") following the most recent financial crisis.3In recent years, Congress has endorsed the role of whistleblowers in preventing or mitigating the kinds of financial improprieties that can lead to economic chaos. Accordingly, Congress has incorporated whistleblower pro- tection provisions into its remedial legislation. SOX was the first of these regulatory responses to include comprehensive protections and incentives for corporate whistleblowers. Although there is considerable empirical evi- dence to suggest that SOX's whistleblowing program was unsuccessful,4 the subsequent introduction of stronger and more expansive whistleblower measures in Dodd-Frank reiterated Congress's belief that whistleblowers play an important role in financial regulation.Despite this unambiguous congressional goal, however, the statutory language of both SOX and Dodd-Frank remains ambiguous as to precisely who can receive these whistleblower protections. Whereas SOX was unclear about which individuals within an organization are entitled to whistleblower protections (for example, direct employees of a company versus employees of a company's contractors),5 Dodd-Frank's ambiguity concerns what ac- tions an individual must take in order to receive whistleblower protections.The heart of the Dodd-Frank debate stems from an internal inconsis- tency in the way that the statute defines "whistleblower." Section 922 of Dodd-Frank amended the Securities Exchange Act of 1934 by adding Sec- tion 21F (codified at 15 U. …