{"id":42604,"date":"2014-06-17T07:39:06","date_gmt":"2014-06-17T11:39:06","guid":{"rendered":"http:\/\/www.hedgeco.net\/news\/?p=42604"},"modified":"2014-06-17T08:59:04","modified_gmt":"2014-06-17T12:59:04","slug":"hedge-fund-paradgim-settles-whistleblower-retaliation-charges-for-2-2-million","status":"publish","type":"post","link":"https:\/\/hedgeco.net\/news\/06\/2014\/hedge-fund-paradgim-settles-whistleblower-retaliation-charges-for-2-2-million.html","title":{"rendered":"Hedge Fund Firm Paradigm Settles Whistleblower Retaliation Charges For $2.2 Million"},"content":{"rendered":"

\"whistleblower-lawyer\"<\/a>New York (HedgeCo.Net) – NY hedge fund advisory firm Paradigm Capital Management and its owner Candace King Weir have agreed to pay $2.2 million to settle SEC charges of engaging in prohibited behavior and then retaliating against the employee who reported the trading activity to the SEC.<\/p>\n

The SEC says that after Paradigm learned that the firm\u2019s head trader had reported potential misconduct to the SEC, the firm engaged in a series of retaliatory actions that ultimately resulted in the head trader\u2019s resignation.\u00a0A Commission rule adopted in 2011 under the Dodd-Frank Act authorized the SEC to bring enforcement actions based on retaliation against whistleblowers who report potential securities law violations to the agency.<\/p>\n

This is the first time the SEC has filed a case under its new authority to bring anti-retaliation enforcement actions. The SEC also charged the firm\u2019s owner with causing the improper principal transactions.<\/p>\n

\u201cParadigm retaliated against an employee who reported potentially illegal activity to the SEC,\u201d said Andrew J. Ceresney, director of the SEC Enforcement Division. \u201cThose who might consider punishing whistleblowers should realize that such retaliation, in any form, is unacceptable.\u201d<\/p>\n

The SEC said: “Paradigm\u2019s head trader reported trading activity revealing that Paradigm engaged in prohibited principal transactions with affiliated broker-dealer C.L. King & Associates while trading on behalf of hedge fund client PCM Partners L.P. II. The SEC\u2019s subsequent investigation found that Paradigm engaged in the trading strategy from at least 2009 to 2011 to reduce the tax liability of the firm\u2019s hedge fund investors. As part of that strategy, Weir directed Paradigm\u2019s traders to sell securities that had unrealized losses from the hedge fund to a proprietary trading account at C.L. King. The realized losses were used to offset the hedge fund\u2019s realized gains. Paradigm engaged in at least 83 principal transactions by selling 47 securities positions from the hedge fund to C.L. King and then repurchasing 36 of those positions for the hedge fund.”<\/p>\n

\u201cFor whistleblowers to come forward, they must feel assured that they\u2019re protected from retaliation and the law is on their side should it occur,\u201d said Sean McKessy, chief of the SEC\u2019s Office of the Whistleblower. \u201cWe will continue to exercise our anti-retaliation authority in these and other types of situations where a whistleblower is wrongfully targeted for doing the right thing and reporting a possible securities law violation.\u201d<\/p>\n

Alex Akesson<\/span>
Editor for\u00a0<\/span>HedgeCo.net<\/a>
alex@hedgeco.net<\/a>
HedgeCo.Net<\/a>\u00a0is a premier\u00a0<\/span>hedge fund database<\/a>\u00a0and community for qualified and accredited investors only. Membership in\u00a0<\/span>HedgeCo.net<\/a>\u00a0is FREE and EASY. We also offer FREE LISTINGS for\u00a0<\/span>Hedge Funds<\/a>!<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

New York (HedgeCo.Net) – NY hedge fund advisory firm Paradigm Capital Management and its owner Candace King Weir have agreed to pay $2.2 million to settle SEC charges of engaging in prohibited behavior and then retaliating against the employee who […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11,16034,3],"tags":[],"class_list":["post-42604","post","type-post","status-publish","format-standard","hentry","category-hedge-fund-fraud","category-hedge-fund-rulings","category-hedgeco-news"],"_links":{"self":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/42604","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/comments?post=42604"}],"version-history":[{"count":7,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/42604\/revisions"}],"predecessor-version":[{"id":42608,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/42604\/revisions\/42608"}],"wp:attachment":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=42604"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=42604"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=42604"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}