Fifth Circuit Limits SEC Whistleblower Program

Antiretaliation provisions only protect employees that provide information on violations of the securities laws to the SEC.

On July 17, the U.S. Court of Appeals for the Fifth Circuit issued a decision in Asadi v. G.E. Energy (USA), LLC, holding that, to be a "whistleblower" under the Securities and Exchange Commission's (SEC's) whistleblower program, an employee must provide information relating to a violation of the securities laws to the SEC.[1] In so ruling, the Fifth Circuit refused to defer to the SEC's regulation providing that internal reports could afford whistleblower protection under the program and declined to follow several district court decisions that had similarly found internal reports to be protected.