SEC Fines Guggenheim Over Anti-Whistleblower Policy

Posted on July 7th, 2021 at 12:02 PM
SEC Fines Guggenheim Over Anti-Whistleblower Policy

From the Desk of Jim Eccleston at Eccleston Law:

The Securities and Exchange Commission (SEC) fined Guggenheim Securities LCC at least $208,000 after discovering that the New York-based firm’s compliance manual contained language that restricted potential whistleblowers from speaking with regulators. According to a settlement order, Guggenheim’s compliance manual stated that employees were “strictly prohibited” from contacting any regulators absent preapproval from the firm’s compliance department. The manual featured the language applicable during a four-year period between 2016 and 2020. The SEC also conceded that it was unaware of any instances where a Guggenheim employee was restricted from reaching out to the regulator to report potential violations. 

Employees allegedly were not required to sign an acknowledgement that they would adhere to the manual’s policies. The SEC reported that Guggenheim did act to correct the issue, including altering the policy manual language and announcing the changes to employees through a compliance alert. Pursuant to the Securities and Exchange Act, the whistleblower incentives and protections sections state that “no person may take any action to impeded an individual from communicating directly with SEC staff about a possible securities law violation, including enforcing, or threatening to enforce, a confidentiality agreement.” 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, regulatory and disciplinary matters.

Tags: eccleston, eccleston law, guggenheim, whistleblower

Return to Archive

TESTIMONIALS

Previous
Next

As a financial advisor with over 20 years of experience, I feel fortunate to call Jim my attorney and friend. He is a fantastic lawyer and trusted advisor. He is skilled in the matters necessary to do the job well. He uses his thoughtful approach and calm demeanor to achieve a positive outcome for the client. If you want to feel confident that nothing will be missed and that you will be represented in a highly professional manner, call Jim Eccleston.

Bill C. and Dan M.

LATEST NEWS AND ARTICLES

February 21, 2024
SEC Alleges Fraud Against Morgan Stanley and Former Executive in Block Trading Business

As reported by the Wall Street Journal, the Securities and Exchange Commission (SEC) has charged Morgan Stanley & Co. LLC and its former head of equity syndicate desk, Pawan Passi, with a multi-year fraud involving the disclosure of confidential information related to block trades.

February 20, 2024
Challenges Persist: Firms Struggle to Comply with Regulation Best Interest

FINRA's annual report for 2024 reveals a concerning trend among broker-dealers, with numerous instances of violations of Regulation Best Interest (Reg BI).

February 19, 2024
FINRA Flags Violations in 70% of Broker-Dealers' Crypto Communications

During a two-year-old targeted examination, the Financial Industry Regulatory Authority (FINRA) has identified potential violations in 70 percent of broker-dealers' communications about cryptocurrencies.