The United States Securities and Exchange Commission this week charged an Albany based hedge fund advisory firm with engaging in prohibited transactions and then retaliating against the employee who reported the illegal trading activity. The company, Paradigm Capital Management agreed to pay $2.2 million to settle the charges.
According to the SEC, the company conducted transactions between Paradigm and a broker-dealer that is also owned by the same owner as Paradigm, while trading on behalf of the hedge fund client. Paradigm failed to disclose this according to the SEC.
The SEC also said that after Paradigm learned that the firm’s head trader had reported potential misconduct to the SEC, it engaged in a series of retaliatory actions that lead to his resignation.
Jeff Newman represents whistleblowers