Rajiv Jain’s GQG Partners settles US SEC charges with $ 5 mn penalty

The SEC charges against Florida-based GQG Partners, a registered concern adviser, were for entering into agreements with candidates for employment and a erstwhile worker that made it much hard for them to study imaginable securities instrumentality violations to the SEC. Jain is the Chairman and Chief Investment Officer of GQG which has assets nether absorption of $ 155 billion.

GQG Partners acquired stakes successful assorted Adani radical companies aft the study by the US-based abbreviated seller Hindenburg Research, released successful January 2023, alleged the Adani radical was progressive successful firm governance issues and misinterpretation of fiscal acumen, starring to a crisp correction successful the banal prices of radical companies.

GQG’s concern successful 4 Adani companies totalled astir Rs 15,400 crore arsenic of March 2023. The marketplace worth of GQG’s concern successful Adani companies has multiplied successful the past 1 year.

According to the SEC’s order, from November 2020 done September 2023, GQG entered into non-disclosure agreements with 12 candidates for employment that prohibited them from disclosing confidential accusation astir GQG, including to authorities agencies. “While the agreements permitted the candidates to respond to requests for accusation from the Commission, it required notification to GQG of immoderate specified petition and prohibited responding to requests arising from a candidate’s voluntary disclosure,” SEC said.

The SEC’s bid recovered that GQG besides entered into a colony statement with a erstwhile worker whose counsel had told GQG that helium oregon she intended to study alleged securities instrumentality violations to the Commission. “Specifically, the colony statement said that it permitted reporting imaginable securities instrumentality violations to authorities agencies, including the Commission,” it said.

“However, it besides required the erstwhile worker to affirm that helium oregon she had not done so, was not alert of facts that would enactment an probe and would retreat immoderate statements already made that mightiness enactment an investigation. These provisions violated the whistleblower extortion rule,” SEC said.

“Whether done agreements oregon otherwise, firms cannot enforce barriers to persons providing grounds astir imaginable securities instrumentality violations to the SEC, arsenic GQG did,” said Corey Schuster, Co-Chief of the Division of Enforcement’s Asset Management Unit. “Even agreements that incorporate carve-out connection allowing radical to voluntarily study to the SEC tin beryllium violative if restrictive connection successful a abstracted proviso impedes voluntary reporting to the Commission staff.”