New York Attorneys May be Precluded from Submitting Information Under Dodd-Frank’s Whistleblower Bounty Provision

The Dodd-Frank Act contains a “bounty” provision intended to incentivize whistleblowers to disclosure information to the SEC regarding violations of U.S. securities and trading statutes and other statutes administered by the SEC.  It is now questionable whether New York attorneys, whether in-house or outside, can qualify for such awards if they disclose the confidential information of their employer to the SEC.

In October 2013, the New York County Lawyers Association Committee on Professional Ethics released Formal Opinion 746, relating directly to attorney participation in the Dodd-Frank Act’s bounty provision.  The Committee stated that New York attorneys may not disclose confidential information relating to current or previous clients except to the extent permitted by the New York Rules of Professional Conduct (NYRPC).

This opinion must be interpreted along with SEC Rule 205, which permits attorneys to reveal confidential information obtained as a result of legal representation of a client only when the disclosure is permitted by state ethics rules or SEC Rule 205.3(d)(2).

It should be noted that this opinion only relates to New York attorneys.  The ethics rules in many other states are broader and allow disclosure of confidential information in a broader range of circumstances than the NYRPC.  Consequently, it is important for any attorney who is a would be whistleblower to consult the scope of the rule sof professional conduct that govern their license(s).