“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,” SEC said.
Without admitting or denying the SEC’s findings, GQG agreed to be censured, to cease and desist from violating the whistleblower protection rule, and to pay a $500,000 civil penalty, it said in a release.
The regulator has charged GQG for entering into agreements with candidates for employment and a former employee that made it more difficult for them to report potential securities law violations to the SEC.
According to the SEC’s order, from November 2020 through September 2023, GQG entered into non-disclosure agreements with 12 candidates for employment that prohibited them from disclosing confidential information about GQG, including to government agencies.
The SEC’s order finds that GQG also entered into a settlement agreement with a former employee whose counsel had told GQG that he or she intended to report alleged securities law violations to the Commission. “Whether through agreements or otherwise, firms cannot impose barriers to persons providing evidence about possible securities law violations to the SEC, as GQG did,” said Corey Schuster, Co-Chief of the Division of Enforcement’s Asset Management Unit.“Even agreements that contain carve-out language allowing people to voluntarily report to the SEC can be violative if restrictive language in a separate provision impedes voluntary reporting to the Commission staff.”