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

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