A hedge fund and its owner will pay USD 2.2 million to settle federal charges that the trades they made set up a conflict of interest and that they retaliated against an employee who reported the conduct to US regulators.
The Securities and Exchange Commission announced the settlement today with Paradigm Capital Management of Albany, New York, and its owner, Candace King Weir. The SEC says it's the agency's first anti-retaliation case to protect a whistleblower under new authority granted by the 2011 financial overhaul law.
The conflict arose because Weir initiated transactions between Paradigm and a brokerage firm she also owns while trading on a hedge fund client's behalf, the SEC said.
Paradigm and Weir neither admitted nor denied the SEC's allegations but agreed to refrain from future violations.
