29 April 2015
The Securities and Exchange Commission (SEC) has financially awarded a whistleblower which led to successful enforcement.
According to the SEC, the whistleblower provided key original information that led to successful enforcement action by the regulator. As a result, the whistleblower has received a maximum award payment of 30% of the amount collected – a total figure of more than $600,000.
The regulator added that the whistleblower also suffered unique hardships, including retaliation, as a result of reporting misconduct at Paradigm Capital Management.
In response, the SEC charged Paradigm with retaliating against the whistleblower after the firm learned that the whistleblower reported potential misconduct.
The SEC adds that Paradigm immediately engaged in a series of retaliatory actions against the whistleblower including removing the whistleblower from the whistleblower’s then-current position, tasking the whistleblower with investigating the very conduct the whistleblower reported to the SEC, changing the whistleblower’s job function, stripping the whistleblower of supervisory responsibilities, and otherwise marginalizing the whistleblower.
Andrew Ceresney, Director of the SEC’s Division of Enforcement said:
‘The Enforcement Division is committed to taking action when appropriate against companies and individuals that retaliate against whistleblowers.’
Sean McKessy, Chief of the SEC’s Office of the Whistleblower, added: ‘Retaliation against whistleblowers is entirely unacceptable. … My hope is that the award today encourages potential whistleblowers to come forward in light of our demonstrated commitment to protect them against retaliatory conduct and make significant financial awards to whistleblowers who suffer employment hardships as a result of reporting possible securities law violations.’