Jul 25

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Fifth Circuit Takes Different Stance on Dodd-Frank Whistleblower Status

The U.S. Court of Appeals for the Fifth Circuit’s decision in Asadi v. G.E. Energy provides a new take on whistleblower protections under the Dodd-Frank Wall Street Reform and Consumer Protection Act.  The Court found that, by definition, a whistleblower must have reported the claimed violation(s) to the U.S. Securities and Exchange Commission (“SEC”) in order to receive protection from retaliation. Subsections (a) of 15 U.S.C. § 78u-6 defines a “whistleblower” as:

“any individual who provides, or 2 or more individuals acting jointly who provide, information relating to a violation of the securities laws to the Commission, in a manner established, by rule or regulation, by the Commission.”

This stance is different than that taken by the SEC itself or by other courts who have addressed the issue and offered a more inclusive view.  Although employers may initially find the decision to favorably narrow the population of protected whistleblowers, it will no doubt encourage more employees to go straight to the SEC rather than attempting to address potential problems in-house first (although internal whistleblowers are still afforded protection under the Sarbanes-Oxley Act).


About the author

Renee Howdeshell

Renee Howdeshell is a founding member of Fulcrum Inquiry, an accounting, finance and economic consulting firm that performs damage analyses for commercial litigation, forensic accountings, royalty & distribution audits, financial investigations, and business valuations. Ms. Howdeshell holds a degree in Finance and Marketing from the University of Virginia's McIntire School of Commerce and is a Certified Public Accountant (CPA) and a Certified Fraud Examiner (CFE). She has testified as an expert witness in federal court, CA state court and arbitration regarding the results of her work. She can be reached at (213) 787-4112 and her resume is available at www.fulcrum.com.

Permanent link to this article: http://betweenthenumbers.net/2013/07/fifth-circuit-takes-different-stance-on-dodd-frank-whistleblower-status/

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