Whistle While You Work: SEC Announces First Retaliation Whistleblower Award

On June 16, 2014, the SEC issued its first-ever charge of whistleblower retaliation under section 922 of the Dodd-Frank Act, charging a hedge fund advisor and its owner with "engaging in prohibited principal transactions and then retaliating against the employee who reported the trading activity to the SEC."

Paradigm Capital Management and owner Candace King Weir agreed to pay $2.2 million to settle the charges, consisting of $1.7 million of disgorgement, a $300,000 civil penalty, and pre-judgment interest on the disgorgement amount. A separate civil suit brought by the whistleblower was settled by the parties in December, 2012.

Some ten months later, the SEC announced an award to the whistleblower and the victim of retaliation in the Paradigm case. On April 28, 2015, in a first award to a whistleblower who also claimed retaliation, the SEC announced that it will pay out the maximum possible bounty to an individual who the SEC determined provided critical