Guggenheim Partners to Settle SEC Allegations of Impeding Whistle-Blowers

The brokerage arm of Guggenheim Partners will pay about $209,000 to settle Securities and Exchange Commission allegations that the firm’s policies discouraged employees from reporting potential wrongdoing, the regulator said.

Until last July, Guggenheim Securities prohibited employees from reaching out to officials at the SEC or other watchdogs without prior consent from the firm’s lawyers, the regulator said in a filing Wednesday. Such restrictions, which the SEC says were included in the firm’s compliance manual for at least four years, run afoul of whistle-blower protections put in place by the 2010 Dodd-Frank Act.

The case comes as the SEC continues to pay out millions to those who provide the agency with information that leads to cases being brought by the agency’s enforcement division. The regulator has awarded almost $1 billion to more than 160 tipsters since its first award in 2012, with tipsters in an individual case eligible for payments ranging from 10% to 30% of the fines collected when penalties exceed $1 million.

Guggenheim corrected the language in its manual and told employees about the change after the SEC contacted the firm, according to Wednesday’s filing. Guggenheim didn’t admit wrongdoing in the settlement.

“We are pleased to resolve the matter,” the firm said in an emailed statement. “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.”

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