Did Fred Alger Management Retaliate Against a Whistleblower?
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When employees come forward with information about potential securities law violations, they're often taking a personal and professional risk. In Ott v. Fred Alger Management, Inc., a federal court examined how far those whistleblower protections extend under the Dodd-Frank Act, and whether employees are covered even when they don't qualify for an SEC financial reward.
Case: Ott v. Fred Alger Management, Inc. et al
Court: Southern District Court of New York
Case No.: 1:2011-cv-04418
The Plaintiff: Ott
The plaintiff, Ott, was employed by Fred Alger Management, Inc., a financial management and investment firm. During her employment, Ott disclosed information to the U.S. Securities and Exchange Commission (SEC) about conduct she believed violated federal securities laws.
Following her disclosure, Ott alleged that she was retaliated against, which is a violation of the anti-retaliation provisions found in the Dodd-Frank Wall Street Reform and Consumer Protection Act. Specifically, she claimed her employer took adverse actions after she cooperated with federal regulators and reported potential wrongdoing.
The Defendant: Fred Alger Management, Inc.
Fred Alger Management, Inc. is a well-known investment advisory firm based in New York, overseeing billions in assets. The company denied Ott's claims, arguing that her disclosures were not "original information" as defined by the SEC's whistleblower program.
Under the defendant's interpretation, only whistleblowers eligible for an SEC award could be shielded by Dodd-Frank's anti-retaliation provisions. Because Ott's information did not qualify for a reward, the company maintained that she was not protected from retaliation under 15 U.S.C. § 78u-6(h).
A History of the Case: How the Court Interpreted Dodd-Frank
The Southern District of New York rejected the company's narrow reading of the law. In a significant decision, the court held that a whistleblower need not qualify for or receive a reward to be protected from retaliation.
The court pointed directly to the SEC's implementing regulations, which clarify that protections against retaliation apply "whether or not you satisfy the requirements, procedures, and conditions to qualify for an award." This means the law safeguards employees who provide information in good faith, even if that information later proves ineligible for an SEC payout.
By focusing on the employee's intent and cooperation rather than the report's outcome, the ruling broadened whistleblower protections nationwide.
The Main Question Being Considered: Who Qualifies for Whistleblower Protection?
The key issue before the court was whether Dodd-Frank's anti-retaliation protections extend to individuals who report possible violations to the SEC but do not qualify for a monetary award.
The court's answer was clear: yes. The anti-retaliation clause is designed to encourage employees to speak up without fear, not to restrict protection only to those who provide profitable or "original" tips. The court emphasized that retaliation protections serve a different purpose from reward eligibility—they exist to prevent employers from punishing employees for doing the right thing.
Why Does This Case Matter to California Workers?
While this case originated in New York, its impact extends to employees nationwide. For California workers (especially those in finance, healthcare, or technology) this decision reinforces that whistleblower protections don't depend on technical eligibility for rewards.
California's own Labor Code Section 1102.5 and the California Whistleblower Protection Act mirror these principles. Employees are protected when they report suspected illegal conduct, whether internally to supervisors or externally to agencies like the SEC.
The Ott case stands as a reminder that integrity and accountability in the workplace should never come at the cost of personal security or employment.
FAQ: Ott v. Fred Alger Management, Inc.
Q: What law did this case interpret?
A: The court interpreted 15 U.S.C. § 78u-6(h), part of the Dodd-Frank Act, which protects employees from retaliation when they report possible securities law violations.
Q: Did the court limit protection to those eligible for an SEC reward?
A: No. The court explicitly held that anti-retaliation protections apply even if the employee's report doesn't qualify for a reward, as long as it was made in good faith.
Q: What does this mean for California whistleblowers?
A: It reinforces that employees in California are protected when reporting misconduct—verbally or in writing—even if the information later turns out ineligible for compensation or doesn't lead to enforcement action.
If you've been fired or retaliated against for reporting illegal or unethical activity on the job, the experienced employment law attorneys at Blumenthal Nordrehaug Bhowmik DeBlouw LLP can help. Contact our office today to discuss your situation and explore your legal options at our offices in Los Angeles, San Diego, San Francisco, Sacramento, Riverside, and Chicago.
