Boutique investment firm GQG Partners has settled charges of potential violations of whistleblower rules with the Securities and Exchange Commission (SEC)—the regulatory body in the United States—by paying a $500,000 penalty.
The securities regulator, in a statement dated September 26, stated that GQG had agreed to be censured and to desist from violating the whistleblower protection rule, along with the payment of the civil penalty, without admitting or denying the findings.
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The investment firm came into the spotlight when it turned out to be a white knight for the Indian conglomerate Adani Group during their troubled times following allegations by short-seller Hindenburg Research.
Following the sharp corrections in the stocks, GQG invested large sums in Adani Group stocks.
According to the SEC’s findings, GQG entered into non-disclosure agreements with 12 candidates for employment between November 2020 and September 2023 that prohibited them from disclosing confidential information about GQG, including to government agencies.
Further, the investment firm also entered into a settlement agreement with a former employee whose counsel had informed GQG that the person intended to report alleged violations of securities law.
“The SEC’s order finds that GQG violated whistleblower protection Rule 21F-17(a), which prohibits any action to impede an individual from communicating directly with the SEC staff about a possible securities law violation,” notes the SEC order.
“Whether through agreements or otherwise, firms cannot impose barriers to persons providing evidence about possible securities law violations to the SEC, as GQG did,” it added.
First Published: Sep 27 2024 | 5:14 PM IST
