For the first time the SEC filed a case under its new authority to bring anti-retaliation enforcement actions. The SEC charged a hedge fund with engaging in prohibited principal transactions and retaliating against the whistleblower. The firm agreed to pay $2.2 million and to hire an independent compliance consultant.
The CIO conducted transactions between the hedge fund and a broker-dealer owned by the CIO, while trading on behalf of a hedge fund client, without effective written disclosure or consent. The head trader was demoted to compliance assistant, after reporting the prohibited transactions to the SEC.