GQG Partners fined $725,000 by SEC for whistleblower protection violations

Florida-based GQG Partners, a $160 billion investment firm listed on the ASX, has been fined $725,000 by the US Securities and Exchange Commission for violating whistleblower protections.

The SEC found that GQG imposed overly restrictive non-disclosure agreements on employees, limiting their ability to report potential securities law violations.

The company has agreed to pay $500,000 for this violation without admitting to or denying the SEC's findings.

Between 2020 and 2023, GQG entered into NDAs with 12 individuals that prohibited them from disclosing confidential company information, including to government agencies.

Corey Schuster, co-chief of the SEC's Division of Enforcement's asset management unit, stated, "Firms cannot impose barriers to individuals providing evidence about possible securities law violations to the SEC. Even agreements that allow for voluntary reporting can still be violative if they contain restrictive language that impedes reporting."

The SEC determined that the NDAs violated whistleblower protections by requiring at least one former employee to inform the company about discussions with authorities and withdraw any previous statements supporting an investigation.

In a response, GQG emphasised its commitment to regulatory compliance, stating, "We appreciate the professionalism displayed by the SEC staff throughout this inquiry. We believe that we are well positioned to serve our team and clients going forward."

Alongside the fine, GQG entered into a settlement agreement with a former employee who intended to report alleged securities law violations to the SEC, though details of those violations remain unclear.

Despite the fine, GQG's stock only dipped 2.78% to $2.80, a modest decline considering its impressive 70% gain year-to-date.

The firm has attracted over $15 billion in new funds since the beginning of the year.

At the time of reporting, GQG Partners' share price was $2.76.