GQG Partners to pay $500,000 as penalty to SEC for violating whistleblower protection rules

GQG Partners, founded by Rajiv Jain, has agreed to pay $500,000 to resolve charges brought by the US Securities and Exchange Commission regarding alleged violations of whistleblower protection regulations, according to the market regulator.

According to a statement by the US SEC on September 26, between 2020 and 2023, GQG Partners required 12 individuals to sign highly restrictive non-disclosure agreements, preventing them from sharing confidential information, even with government regulators and agencies.

GQG Partners reached a settlement before the administrative and cease-and-desist proceedings, without admitting or denying the findings. However, the firm, led by Rajiv Jain, recognized the SEC's authority in the matter.

“Whether through agreements or otherwise, firms cannot impose barriers to persons providing evidence about possible securities law violations to the SEC, as GQG did. Even agreements that contain carve-out language allowing people to voluntarily report to the SEC can be violative if restrictive language in a separate provision impedes voluntary reporting to the Commission staff,” said Corey Schuster, Co-Chief of the Division of Enforcement’s Asset Management Unit.

Without admitting or denying the SEC's findings, GQG consented to being censured, agreed to cease and desist from violating the whistleblower protection rule, and will pay a civil penalty of $500,000.

GQG Partners is a global boutique asset management firm recognized for its active portfolio management and commitment to delivering long-term value to clients. Through this firm, its chairman and chief investment officer, Rajiv Jain, has made significant investments in several Indian companies, including those within the Adani Group.

Jain's investments in the Gautam Adani-led companies followed the release of a report by short-seller Hindenburg Research in January 2023. The report highlighted concerns over corporate governance and debt issues within the Adani Group, triggering a sharp decline in the group's stock prices.

GQG Partners has also placed substantial investments in India's equity market, focusing on the infrastructure, consumer goods, and energy sectors.