Quantcast
Get breaking news alerts via email

Click here to manage your alerts
Hedge fund, owner Weir paying $2.2M in case
SEC Probe » Whistleblower triggered conflict of interest charges against Paradigm Capital.
First Published Jun 16 2014 02:22 pm • Last Updated Jun 16 2014 02:50 pm

Washington • A hedge fund and its owner will pay $2.2 million to settle federal charges that the firm set up trades that represented a conflict of interest and then retaliated against a high-ranking employee who reported the conduct to regulators.

The Securities and Exchange Commission announced the settlement Monday with Paradigm Capital Management of Albany, New York, and its owner, Candace King Weir. The SEC said it’s the agency’s first case to protect a whistleblower under the new anti-retaliation authority granted by the 2011 financial overhaul law.

Join the Discussion
Post a Comment

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.

That type of arrangement can create a conflict between the interests of a hedge fund’s manager and those of a client, the agency said. Hedge fund managers are required by law to disclose in writing that they are taking positions on both sides of a trade and to obtain the client’s consent before completing each transaction.

Paradigm and Weir neither admitted nor denied the SEC’s allegations but agreed to refrain from future violations. Under the settlement, they are returning $1.7 million plus $181,771 to investors in Paradigm and a $300,000 civil penalty.

In addition, Paradigm agreed to hire an independent compliance consultant.

"We are pleased to resolve this matter and have it behind us," Paradigm and Weir said in a statement.

The whistleblower, who was the head trader at Paradigm, resigned in August 2012. After learning that he had reported possible violations to the SEC, the firm retaliated by demoting him to compliance assistant, stripping him of his supervisory duties, and assigning him to investigate the same conduct he had reported, the agency said. The SEC didn’t identify the whistleblower.

Weir also operates a private nonprofit foundation in Albany that reported $20 million in assets and gave nearly $1 million in 2012 to more than 100 groups, including $504,000 to the Museum of Modern Art in Manhattan.


story continues below
story continues below



Copyright 2014 The Salt Lake Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Top Reader Comments Read All Comments Post a Comment
Click here to read all comments   Click here to post a comment


About Reader Comments


Reader comments on sltrib.com are the opinions of the writer, not The Salt Lake Tribune. We will delete comments containing obscenities, personal attacks and inappropriate or offensive remarks. Flagrant or repeat violators will be banned. If you see an objectionable comment, please alert us by clicking the arrow on the upper right side of the comment and selecting "Flag comment as inappropriate". If you've recently registered with Disqus or aren't seeing your comments immediately, you may need to verify your email address. To do so, visit disqus.com/account.
See more about comments here.
Staying Connected
Videos
Jobs
Contests and Promotions
  • Search Obituaries
  • Place an Obituary

  • Search Cars
  • Search Homes
  • Search Jobs
  • Search Marketplace
  • Search Legal Notices

  • Other Services
  • Advertise With Us
  • Subscribe to the Newspaper
  • Access your e-Edition
  • Frequently Asked Questions
  • Contact a newsroom staff member
  • Access the Trib Archives
  • Privacy Policy
  • Missing your paper? Need to place your paper on vacation hold? For this and any other subscription related needs, click here or call 801.204.6100.