Florida Investment Advisory Firm Charged By SEC for Whistleblower Violations
On September 26th, 2024, the Securities and Exchange Commission (SEC) announced charges against a Florida-based investment advisory firm. The federal agency determined that GQG Partners LLC used employment contracts to improperly dissuade whistleblower activity. The investment advisory firm agreed to settle the matter without admitting any wrongdoing. Here, our SEC whistleblower rights attorney discusses the enforcement action.
SEC Whistleblower Violations: Improper Employment Contract Language
GQG Partners LLC is an investment advisory firm headquartered in Fort Lauderdale, Florida. The firm reports that it has more than $150 billion in assets under management. The SEC took enforcement action against this firm on the grounds that it violated the federal securities law whistleblower protection rule. The SEC Order emphasizes that GQG Partners LLC had job candidates sign employment agreements that improperly dissuaded them from engaging in whistleblower activity. The agreements in question reportedly contained extremely broad non-disclosure requirements. Specifically, the employment agreements stated:
- Employees could respond to SEC inquiries; and
- Employees had to notify the firm if they cooperated with the SEC.
In its order, the SEC clarifies that these agreements are unlawful. Firms cannot require employees or any other associated persons to notify them if they cooperate with the SEC. Indeed, the federal agency noted that “firms cannot impose barriers to persons providing evidence about possible securities law violations to the SEC.” A contract provision that mandates disclosure to the employer is, by definition, a disincentive to cooperate with the SEC. It is not lawful for firms.
GQG Partners LLC Consented to Sanctions Without Admitting Liability
GQG Partners LLC acknowledged the civil charges brought by the SEC. Without admitting or rejecting any of the specific allegations or any wrongdoing more generally, the Florida-based investment advisory firm consented to the agency’s proposed penalties. The firm will be publicly censured and will pay a $500,000 civil financial penalty.
Dodd-Frank Act Strictly Prohibits Retaliation Against SEC Whistleblowers
The Dodd-Frank Act contains explicit provisions that protect whistleblowers from retaliation by employers when they report securities violations to the SEC. Under the law, employees who provide information about fraudulent activities are entitled to legal protection against any form of employer retaliation—including termination, demotion, or harassment.
Of course, it is also important to emphasize that securities industry whistleblowers may be eligible for financial rewards if their information leads to a successful enforcement action by the SEC. If the SEC brings action that leads to monetary sanctions exceeding $1 million, a whistleblower who helped provide information to support that enforcement action may obtain a financial award valued at between 10 percent and 30 percent the total value of the case.
Consult With Our SEC Whistleblower Lawyer in South Florida Today
At Carlson & Associates, P.A., our Florida SEC whistleblower attorney has the skills, knowledge, and experience that clients can trust. Are you considering making a disclosure to the SEC? Speak to a lawyer first. Your initial consultation is always strictly confidential. We represent SEC whistleblowers in Miami-Dade County, South Florida, and beyond.
Source:
sec.gov/newsroom/press-releases/2024-150