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The Daily

SEC: Former In-House Counsel Can Be Whistleblowers in Tax Case

Chris Gaetano
Published Date:
Mar 31, 2016
SECURITIES-AND-EXCHANGE-COMMISSION-facebookThe Securities and Exchange Commission (SEC) recently filed a brief saying that it believes former in-house counsels can be considered a whistleblower under the Dodd-Frank Act, according to CorporateCounsel.com. The SEC filed its brief in response to allegations by a former lawyer that Vanguard Group owes $35 billion in federal and state taxes, who was later fired. The lawyer, David Danon, filed for wrongful termination and, in a separate suit, sought the whistleblower bounty for revealing the information. Vanguard's lawyers, though, argued that because Danon did not go to regulators until after he was fired, he does not count as a whistleblower. The SEC, though, argued that a broader reading of the Dodd-Frank Act indicates that he did not have to immediately go to the commission to still be considered a whistleblower and therefore able to benefit from protection and monetary rewards. It also argued that whistleblower protections apply to tax cases as well, saying it would be unreasonably narrow if the law only applied to securities law violations.