Jordan A. Thomas advises whistleblower, leading to the SEC's $2.2 million fine against Paradigm Capital Management
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June 17, 2014
Albany, New York-based Paradigm Capital Management has become the first firm sanctioned by the Securities and Exchange Commission (SEC) for retaliating against a whistleblower.
Paradigm settled those allegations and those stemming from the whistleblower's report to the SEC, that it had engaged in prohibited principal transactions designed to reduce investors' tax liability. The firm agreed to pay $2.2 million, but did not admit or deny wrongdoing.
Partner Jordan Thomas of Labaton Sucharow, a former assistant director in the SEC's enforcement division, served as counsel for the SEC whistleblower.
"I often advise my clients that it's not always easy or glamorous to be a corporate whistleblower, but the SEC has their back and the ability to remain anonymous when reporting possible securities violations can make doing the right thing a lot easier," said Thomas, who helped develop the SEC Whistleblower Program, in a statement.
"Each time the SEC has issued a whistleblower award, awareness of the program has grown and other knowledgeable individuals have chosen to break their silence and come forward. In the coming years, based upon my experience at the SEC and now in private practice, I believe enforcement records will be broken and many of the Commission's most significant enforcement actions will be the result of courageous whistleblowers."
"These types of securities violations are often difficult for the SEC to detect and prosecute without a source on the inside—that's what makes the SEC whistleblower program such a game changer," said Thomas.