Companies Ignore Whistleblowers at Their Peril

The U.S. Securities and Exchange Commission last month brought its first ever whistleblower retaliation case against Paradigm Capital Management. The hedge fund paid $2.2 million to settle allegations that it demoted its head trader after he reported potential illegal trading to the commission.

Jordan Thomas, a former SEC official and the attorney who represented the Paradigm trader, says that companies would do well to follow a few simple rules: “Pay attention to what people are telling you. Don’t retaliate. Show appreciation and say thank you for bringing it to our attention. And don’t hunt an anonymous whistleblower.”