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Neb. Dodd-Frank whistleblower retaliation case settled before trial

By Rebecca Campbell | Apr 5, 2016

LINCOLN, Neb. (Legal Newsline) – A woman who claimed she was fired for reporting violations on the part of her employer has settled her Dodd-Frank Act lawsuit after a judge determined the law's whistleblower provision applied to her.

Julie Bussing sued COR Clearing in 2012 in Nebraska federal court, claiming that she was fired in violation of the Dodd-Frank Act in April of 2012. It was alleged that while working with a Financial Industry Regulatory Authority (FINRA) request, Bussing found violations of the Bank Secrecy Act and of anti-money laundering rules with Legent Clearing LLC, COR’s predecessor.

Bussing’s suit claimed she was fired for being a whistleblower about one month after presenting her findings to COR’s top executives.

COR argued in the lower court that Bussing was not protected by the Dodd-Frank’s whistleblower provision. It based this argument on the fact that Bussing did not report the violations directly to the SEC, but to FINRA instead. The lawsuit was settled in February.

Jeana Goosmann, CEO & Managing Partner at Goosmann Law Firm in Sioux City, Iowa, told Legal Newsline that a federal appeals court had already ruled that in order to receive the protection of whistleblower laws provided for in legislation like Dodd-Frank, an employee who has been retaliated against by an employer must first file a complaint with the SEC.

“The (U.S. Court of Appeals for the) Fifth Circuit in Asadi v. GE Energy USA LLC ruled in 2013 that anti-retaliation provisions in Dodd-Frank only protect whistleblowers who disclose alleged fraud to the U.S. Securities and Exchange Commission and not just internally to a company," she said.

U.S. District Judge John Gerrard did not agree with the argument presented by COR and as a result did not side with it.

However, Gerrard did permit COR to request an appeal with the Eighth Circuit, which declined to hear it.

“There is a separate provision allowing whistleblowers to sue employers for retaliation in several enumerated situations, one of which requires that the whistleblower has made disclosures required or protected by the Sarbanes-Oxley Act," Goosmann said.

“However, the law does not specifically require disclosure to the SEC.”

As such there is a conflict between the definition of whistleblower and the specific language of the anti-retaliation section.

“The SEC itself has stated that a whistleblower need not have reported wrongdoing to the SEC to avail himself of Dodd-Frank’s anti-retaliation protections,” Goosmann said.

A trial was scheduled to begin in March. But, after both parties filed motions ahead of the trial start date, they filed a two-page request for the dismissal of the case on Feb.10, stating that the matter had been settled..

“At least five district courts have rules that the Dodd-Frank provisions at issue are either ambiguous or conflicting,” Goosmann said.

“Each has adopted the more expansive view of Dodd-Frank whistleblower protections that allows for anti-retaliation protections for those who only report internally.”

Bussing was also alleging breach of contract and negligence claims against COR, which was also trying to prove that Bussing should not proceed with those claims as she had not done enough to support them.

“The trial court would have had to decide the legal sufficiency of these additional claims before going to the jury for a decision,” Goosmann said.

“It is difficult to predict how Ms. Bussing would have ended up on those claims. This fact may explain, in part, why an out-of-court settlement was reached.”

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