SEC Charges Broker-Dealer for Violating Whistleblower Protection Rule
June 23, 2021
File No. 3-20370
June 23, 2021 – The Securities and Exchange Commission today announced settled charges against a New York-based registered broker-dealer, Guggenheim Securities, LLC, for violating a whistleblower protection rule that prohibits taking any action to impede an individual from communicating directly with SEC staff about a possible securities law violation.
The SEC’s order finds that, from at least 2016 to 2020, Guggenheim’s Core Compliance Manual prohibited its employees from initiating contact with any regulator, including the SEC, without prior approval from the firm’s legal or compliance department. The order also finds that, in 2018 and 2019, Guggenheim provided annual compliance training to its employees that included similar language. According to the order, after SEC staff contacted Guggenheim in this matter, the firm revised the manual by removing the language prohibiting employees from contacting regulators without approval, and adding language affirmatively advising employees of their right to contact regulators with concerns about potential legal or regulatory violations.
The SEC’s order finds that Guggenheim willfully violated Rule 21F-17 of the Securities Exchange Act of 1934. Guggenheim has agreed, without admitting or denying the SEC’s findings, to a cease-and-desist order, a censure, and a civil penalty in the amount of $208,912.
The SEC’s investigation was conducted by Jeffrey D. Felder and supervised by Kimberly L. Frederick and Jason J. Burt of the SEC’s Denver Regional Office.