The whistleblower provision of the Dodd-Frank Wall Street and Consumer Protection Act has been a hot topic in corporate law circles from the outset. So it’s no surprise that the 5th Circuit ruling in Asadi v G.E. Energy has attracted the attention of inside counsel and their outside law firms.
Under a Dodd-Frank provision, which took effect in August 2011, whistleblowers that give the government original information about possible violations of federal securities laws can garner awards ranging from 10 to 30 percent of the penalty if their information leads to an enforcement action and monetary sanctions exceeding $1 million. That powerful incentive arguably boosted an already growing trend of worker whistleblowing, and encouraged employees to bypass internal reporting procedures and go directly to the government. That prevents employers from conducting their own investigations and, if necessary, taking remedial action prior to an SEC probe.
