The Dodd-Frank Wall Street Reform and Consumer Protection Act – a compendium of federal regulations passed by the Obama administration that were designed to prevent the recurrence of events in the US financial system that led to the 2008 financial crisis – has divided opinion on its effectiveness since it was first introduced in 2010.

Upon its enactment by Congress, the Dodd-Frank Act represented the largest financial regulation overhaul in the US since the Great Depression of the 1930s.

Drilling down, one of the more controversial aspects of the Dodd-Frank Act has been its whistleblowing rules (Section 922) – essentially an amendment to the Securities Exchange Act of 1934 (Section 21F, ‘Securities Whistleblower Incentives and Protection’) which directs the US Securities and Exchange Commission (SEC) to “make monetary awards to eligible individuals who voluntarily provide original information that leads to successful Commission enforcement actions resulting in monetary sanctions over $1m”.

In December 2014, these contentious whistleblowing rules sparked even more controversy when, in a potentially seismic decision, the Court of Appeals for the Third Circuit in Khazin v. TD Ameritrade Holding Corp., et al. held that Dodd-Frank Act whistleblower retaliation claims are not exempt from pre-dispute arbitration agreements.

As the dust settles, the decision made by the Court of Appeals may have significant repercussions for whistleblowers in the future.


Since the US Court of Appeals for the Third Circuit handed down its decision that retaliation claims are not exempt from pre-dispute arbitration agreements, much has been written and discussed as to the whys and wherefores.

Apr-Jun 2015 issue

Fraser Tennant