Lady Bee084
5 years ago
A former employee of hedge-fund advisory company Paradigm has been awarded over $600,000 in a retaliation case. Wall Street Journal reports that for the first time, the Securities and Exchange Commission (SEC) gave the whistleblower a maximum 30 percent cut from the penalty the company had to pay. It is the first time the agency […]
Whistleblower to Receive over $600,000 in Retaliation Case
A former employee of hedge-fund advisory company Paradigm has been awarded over $600,000 in a retaliation case. Wall Street Journal reports that for the first time, the Securities and Exchange Commission (SEC) gave the whistleblower a maximum 30 percent cut from the penalty the company had to pay. It is the first time the agency has distributed part of a penalty to a tipster.
SEC says the whistleblower submitted a tip of Paradigm’s alleged wrongdoing in March 2012, WSJ reports. He alleged that while the company was trading on behalf of hedge-fund client PCM Partners L.P. II, it engaged in prohibited principal transactions with affiliated broker-dealer C.L. King & Associates. According to the agency, the whistleblower faced retaliatory actions after informing owner Candace King Weir that he reported the issue in 2012. The company changed his job function, took away his supervisory responsibilities and tasked him to investigating the conduct he reported. Later on, he resigned.
The SEC charged Paradigm with engaging in prohibited principal transactions and for retaliating against the whistleblower last year, WSJ reports. It was alleged that Ms. Weir was to blame for the transactions; she agreed to pay $2.2 million to settle the allegations without admitting wrongdoing. The whistleblower was awarded the maximum 30 percent allowed by the program.
Andrew Ceresney, the SEC’s enforcement director, said “We appreciate and recognize the sacrifice this whistleblower made and the important role the whistleblower played in the success of the SEC’s first anti-retaliation enforcement action,” according to WSJ.