The Supreme Court strengthened whistleblower protections in a unanimous decision this month, rejecting an argument that financial whistleblowers need to prove their employers acted with “retaliatory intent” to recover damages when they are fired for engaging in protected activity under the law.

The 9-0 vote was a win for former UBS Securities bond strategist Trevor Murray, who had filed a whistleblower complaint under the Sarbanes-Oxley Act (SOX) saying he was fired from UBS for reporting violations of federal securities laws. Murray won a jury trial and a $2.6 million verdict against UBS in district court. UBS, however, won on appeal to the Second U.S. Circuit Court of Appeals, which ruled that Murray had to prove that UBS acted with retaliatory intent — not just that his report and his firing were connected. This intent interpretation differed from the rulings of four other federal appeals courts.

In her opinion for the Supreme Court that restored the jury verdict, Justice Sonia Sotomayor cited the original text of the SOX, which says no employer subject to the law “may discharge, demote, suspend, threaten, harass, or in any other manner discriminate against an employee in the terms and conditions of employment because of” the employee’s protected whistleblowing activity. The text does not reference or include a “retaliatory intent” requirement, she wrote.

“It does not matter whether the employer was motivated by retaliatory animus or was motivated, for example, by the belief that the employee might be happier in a (different) position,” she wrote, adding “… The health, safety, or well-being of the public may well depend on whistleblowers feeling empowered to come forward. This Court cannot override that policy choice by giving employers more protection than the statute itself provides.”

Robert Herbst, a lawyer for Murray, said the decision was “a huge victory for whistleblowers all across the country.” 

Here’s why: Whistleblower advocates like Keller Grover’s whistleblower attorneys expressed their concern that had the Supreme Court not ruled in favor of Murray, would-be whistleblowers would be discouraged from taking the significant risk of coming forward to report financial frauds if they had to prove a defendant’s intent in order to receive protections.  

This was also the position articulated by the Anti-Fraud (TAF) Coalition in TAF’s amicus brief supporting Murray before the Supreme Court. Keller Grover attorneys are members of TAF and support its mission to support whistleblowers.

Murray was a research strategist for UBS Securities’ commercial mortgage-backed securities (CMBS) arm. Federal regulations dictate that researchers like Murray come up with independent opinions, but he repeatedly was pressured to publish notes slanted in favor of his company’s strategies. He reported the situation to his boss — twice — calling it unethical and illegal. Still, he received a positive annual performance review. Then he was fired, leading to his complaint.

“Brave whistleblowers take on substantial personal and financial risk to shine a light on unscrupulous companies engaged in illegal activity that could not only harm individual investors, but potentially cause broader harm to the financial markets,” Jacklyn DeMar, Director of Legal Education for TAF Coalition said last year. “They deserve the protection that the plain language of the statute requires and that Congress clearly intended.”

The lawyers at Keller Grover have three decades of experience representing whistleblowers and follow the latest developments in the law so they can advise potential whistleblowers about the best path forward from the very beginning, helping minimize the impact of reporting, protect their rights and achieve the best possible outcome. If you have information about financial securities fraud, contact us for a confidential, free consultation.