- Guggenheim violated whistleblower protections when its policies prohibited employees from reporting potential wrongdoing, the SEC said.
- Guggenheim’s employee manual required employees to contact the firm’s internal legal department before contacting regulators.
- The firm will pay a $208,912 fine to settle charges from the SEC.
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The brokerage arm of Guggenheim Partners will pay a $208,912 fine to settle a Securities and Exchange Commission charge that the firm’s policies discouraged employees from reporting potential wrongdoing, the US regulator said.
From at least 2016 to 2020, Guggenheim’s Core Compliance Manual prohibited employees from initiating contact with any regulator, including the SEC, without prior approval from the firm’s compliance or legal department. This was a violation of the SEC’s whistleblower protection rules put in place by the 2010 Dodd-Frank Act.
The SEC also found that in 2018 and 2019, Guggenheim’s annual compliance training for employees contained similar language.
Guggenheim removed the language prohibiting employees from contacting officials after the SEC contacted the firm. Guggenheim also added language that affirmatively advised employees of their right to contact regulators without legal penalty.
Guggenheim did not admit or deny the SEC’s allegations. Along with paying the fine, the firm has agreed to a cease-and-desist order and a censure.
The firm in an email to Bloomberg said: “We are pleased to resolve the matter. Guggenheim Securities has always sought to protect whistle-blower rights, and we note that the SEC acknowledged in this settlement that there was no evidence that Guggenheim Securities impeded whistle-blower communications, if any. “