Federal regulators are going after an eight-year-old, 213-employee, $155-billion-AUM (as of June 30) fund firm, accusing them of violating whisteblower protections. Last week, the asset manager settled the charges for $500,000.

Rajiv Jain GQG Partners Co-Founder, Chairman, Chief Investment Officer

Last Thursday (September 26), Corey Schuster, co-chief of the asset management unit with the enforcement division at the U.S. Securities and Exchange Commission (SEC), unveiled charges against Fort Lauderdale, Florida-based GQG Partners LLC [profile]. In an eight-page order, the regulatory agency focuses on the non-disclosure agreements (NDAs) that GQG had some job candidates, and one ex-employee, sign between November 2020 and September 2023. More specifically, SEC investigators (led by Marilyn Ampolsk, Marie DeBonis, and Brian Fitzpatrick, under the supervision of Schuste, Andrew Dean, and Virginia Rosado Desilets) say that those NDAs violated 2010's Dodd-Frank Act by being too restrictive about candidates' potential whistleblower interactions with the SEC.

As is typical in many SEC settlements, GQG agreed to the settlement but neither admitted nor denied the SEC's findings. Yet the SEC's order specifically highlights GQG's "cooperation and remedial acts promptly undertaken," noting that the GQG team voluntarily provided findings and data from an outside expert, replaced the NDAs in question with ones designed to avoid the alleged violations, and notified the candidates and ex-employees in question of the changes.

"GQG takes its regulatory compliance obligations very seriously," a GQG spokesperson tells MFWire via email. "We appreciate the professionalism displayed by the SEC staff throughout this inquiry. We believe that we are well positioned to serve our teams and clients going forward."

The settlement agreement censures GQG and requires the firm to cease and desist from future violations, in addition to paying the aforementioned monetary penalty.

"Whether through agreements or otherwise, firms cannot impose barriers to persons providing evidence about possible securities law violations to the SEC, as GQG did," Schuster states. "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." 

Stay ahead of the news ... Sign up for our email alerts now
CLICK HERE