New York Judge Rules that Foreign FCPA Whistleblowers Are Not Protected Under Dodd-Frank’s Anti-Retaliation Provision

Does Dodd-Frank’s Anti-Retaliation Provision protect a foreign employee who reports FCPA violations based on conduct that occurred extraterritorially?  A court in the Southern District of New York recently became the second district court in the country to say that it does not.  Judge William H. Pauley III granted Siemens A.G.’s motion to dismiss Meng-Lin Liu’s case against it on October 21, 2013, holding that whistleblower protection does not apply to activity outside the United States, but declining to opine on whether Dodd-Frank’s definition of “whistleblower” extends to those who report to the SEC after the alleged retaliation has occurred.  Liu, a Taiwanese resident who worked for Siemens’ Chinese subsidiary, alleges that he was retaliated against after he internally reported a potential FCPA violation regarding an alleged kickback scheme in China and Korea.  He reported it to the SEC after he was terminated.  Siemens has a checkered FCPA history, having paid a record-breaking fine in 2008.  See “Lessons Learned on Crafting Compliance Programs from the Largest FCPA Case in History” (Jul. 11, 2012).  For more on Dodd-Frank’s whistleblower provisions, see “Seven Steps Companies Can Take to Incentivize Internal Reporting of FCPA Violations” (Jul. 11, 2012). 

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