--- title: "Protecting Whistleblowers: The SEC’s First Anti-Retaliation Enforcement Case" description: "Protecting Whistleblowers: The SEC’s First Anti-Retaliation Enforcement Case" --- [![Jacko Law Group, PC - Securities Law](https://resources.jackolg.com/hubfs/Jackolawgroup%20February2018/image/brand.png)](http://www.jackolg.com/) Call Today for a Consultation San Diego 619-298-2880 San Francisco 415-766-3599 Los Angeles 213-631-2549 Menu [Contact](http://www.jackolg.com/Contact.shtml) - [Home](http://www.jackolg.com/) - [Firm Overview](http://www.jackolg.com/Firm-Overview/) - [Professionals](http://www.jackolg.com/Professionals/) - [Events](http://www.jackolg.com/Events.shtml) - [News](http://www.jackolg.com/News-Room/) - [Blog](http://www.jackolg.com/blog/) - [Videos](http://www.jackolg.com/Videos.shtml) - [Contact](http://www.jackolg.com/Contact.shtml) # Understand. Define. Achieve. 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View Our Practice Areas - [SEC/FINRA Regulatory Counsel](http://www.jackolg.com/Regulatory-Examinations-and-Inquiries-SEC-and-FINRA/) - [Private Equity & Hedge Fund Counsel](http://www.jackolg.com/Private-Equity-Counsel/) - [Investment Adviser Services](http://www.jackolg.com/Legal-Considerations-for-Breaking-Away/Investment-Adviser-Counsel.shtml) - [Breakaways And Transitions](http://www.jackolg.com/Legal-Considerations-for-Breaking-Away/) - [General Corporate Counsel](http://www.jackolg.com/Corporate-Counsel/) - [Broker- Dealer Counsel](http://www.jackolg.com/Broker-Dealer-Counsel/) #### News - [Legal Tips](http://www.jackolg.com/News-Room/) - [Publications](http://www.jackolg.com/News-Room/Publications.shtml) - [Blog](http://www.jackolg.com/blog/) # Jacko Law Group Blog # Protecting Whistleblowers: The SEC’s First Anti-Retaliation Enforcement Case A landmark case of whistleblower anti-retaliation enforcement has recently been settled between the [Securities and Exchange Commission (“SEC”)](http://www.sec.gov/index.htm) and the advisory firm Paradigm Capital Management (“Paradigm”) and Candace King Weir (“Weir” the majority owner of paradigm) in the first case of its kind under the SEC’s ["new authority to protect whistleblowers against retaliation by employers."](http://ww2.cfo.com/regulation/2014/06/cfo-conflict-interest-part-sec-case-hedge-fund/) After a trader exposed evidence to the SEC of Weir’s involvement in causing Paradigm to engage in principal transactions to reduce tax liability on behalf of its hedge fund investors without effective disclosures or consent, Paradigm targeted the trader for retaliation. The SEC pressed anti-retaliation charges, amongst others, resulting in a settlement of $2.2 million paid out by Paradigm without the admission of wrongdoing. In the [cease-and-desist order](http://www.sec.gov/litigation/admin/2014/34-72393.pdf) against Paradigm, the SEC alleges that the adviser did not provide effective written disclosure to its clients due to Ms. Weir’s conflict of ultimately controlling both Paradigm and the broker-dealer. Even though disclosure and consent was provided to a “conflict committee” on behalf of PCM Partners, LP II (the “fund” and client of the adviser), such consent was not effective due to the fact that Paradigm’s Chief Financial Officer (“CFO”) who also served as the broker-dealers CFO, could not provide such approval because he was conflicted. The consent should have been given to the underlying fund investors instead. The head trader voluntarily made a whistleblower submission to the SEC regarding these principal transactions. Three months later when the head trader opted to disclose his actions to Weir, retaliation occurred. The firm demoted the trader to compliance assistant and forced him to investigate [“the very conduct he reported to the SEC”, while also “stripping him of his supervisory responsibilities, and otherwise marginalizing him.”](http://www.sec.gov/News/PressRelease/Detail/PressRelease/1370542096307#.U6SjrtJOXow) The SEC’s actions against Paradigm’s retaliation efforts highlights a move into a new era of whistleblower protection, where whistleblowers can come forward and [“feel assured that they’re protected from retaliation, and the law is on their side should it occur.”](http://www.sec.gov/News/PressRelease/Detail/PressRelease/1370542096307#.U6SjrtJOXow) For further information on this and other related subjects, please contact us at [info@jackolg.com](mailto:info@jackolg.com) or (619) 298-2880. ### Legal Tip Archive - [September 2011 (5)](https://resources.jackolg.com/archive/2011/09) - [April 2014 (5)](https://resources.jackolg.com/archive/2014/04) - [August 2014 (5)](https://resources.jackolg.com/archive/2014/08) - [September 2015 (5)](https://resources.jackolg.com/archive/2015/09) - [August 2011 (4)](https://resources.jackolg.com/archive/2011/08) - [October 2011 (4)](https://resources.jackolg.com/archive/2011/10) - [June 2012 (4)](https://resources.jackolg.com/archive/2012/06) - [July 2012 (4)](https://resources.jackolg.com/archive/2012/07) - [August 2012 (4)](https://resources.jackolg.com/archive/2012/08) - [October 2012 (4)](https://resources.jackolg.com/archive/2012/10) - [November 2012 (4)](https://resources.jackolg.com/archive/2012/11) - [January 2013 (4)](https://resources.jackolg.com/archive/2013/01) - [March 2013 (4)](https://resources.jackolg.com/archive/2013/03) - [April 2013 (4)](https://resources.jackolg.com/archive/2013/04) - [May 2013 (4)](https://resources.jackolg.com/archive/2013/05) - [June 2013 (4)](https://resources.jackolg.com/archive/2013/06) - [September 2013 (4)](https://resources.jackolg.com/archive/2013/09) - [October 2013 (4)](https://resources.jackolg.com/archive/2013/10) - [January 2014 (4)](https://resources.jackolg.com/archive/2014/01) - [February 2014 (4)](https://resources.jackolg.com/archive/2014/02) - [March 2014 (4)](https://resources.jackolg.com/archive/2014/03) - [May 2014 (4)](https://resources.jackolg.com/archive/2014/05) - [June 2014 (4)](https://resources.jackolg.com/archive/2014/06) - [July 2014 (4)](https://resources.jackolg.com/archive/2014/07) - [December 2014 (4)](https://resources.jackolg.com/archive/2014/12) - [January 2016 (4)](https://resources.jackolg.com/archive/2016/01) - [November 2011 (3)](https://resources.jackolg.com/archive/2011/11) - [December 2011 (3)](https://resources.jackolg.com/archive/2011/12) - [January 2012 (3)](https://resources.jackolg.com/archive/2012/01) - [February 2012 (3)](https://resources.jackolg.com/archive/2012/02) - [April 2012 (3)](https://resources.jackolg.com/archive/2012/04) - [May 2012 (3)](https://resources.jackolg.com/archive/2012/05) - [September 2012 (3)](https://resources.jackolg.com/archive/2012/09) - [December 2012 (3)](https://resources.jackolg.com/archive/2012/12) - [July 2013 (3)](https://resources.jackolg.com/archive/2013/07) - [August 2013 (3)](https://resources.jackolg.com/archive/2013/08) - [November 2013 (3)](https://resources.jackolg.com/archive/2013/11) - [December 2013 (3)](https://resources.jackolg.com/archive/2013/12) - [January 2015 (3)](https://resources.jackolg.com/archive/2015/01) - [February 2015 (3)](https://resources.jackolg.com/archive/2015/02) - [March 2015 (3)](https://resources.jackolg.com/archive/2015/03) - [July 2015 (3)](https://resources.jackolg.com/archive/2015/07) - [August 2015 (3)](https://resources.jackolg.com/archive/2015/08) - [November 2015 (3)](https://resources.jackolg.com/archive/2015/11) - [February 2016 (3)](https://resources.jackolg.com/archive/2016/02) - [March 2012 (2)](https://resources.jackolg.com/archive/2012/03) - [February 2013 (2)](https://resources.jackolg.com/archive/2013/02) - [October 2014 (2)](https://resources.jackolg.com/archive/2014/10) - [November 2014 (2)](https://resources.jackolg.com/archive/2014/11) - [April 2015 (2)](https://resources.jackolg.com/archive/2015/04) - [May 2015 (2)](https://resources.jackolg.com/archive/2015/05) - [June 2015 (2)](https://resources.jackolg.com/archive/2015/06) - [October 2015 (2)](https://resources.jackolg.com/archive/2015/10) - [December 2015 (2)](https://resources.jackolg.com/archive/2015/12) - [July 2011 (1)](https://resources.jackolg.com/archive/2011/07) - [September 2014 (1)](https://resources.jackolg.com/archive/2014/09) see all #### News - [Legal Tips](http://www.jackolg.com/News-Room/) - [Publications](http://www.jackolg.com/News-Room/Publications.shtml) - [Blog](http://www.jackolg.com/blog/) [Email Us For A Response](http://www.jackolg.com/Contact.shtml) #### How Can We Help? 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