Hedge Fund D.E. Shaw Impeded Potential Whistleblowers, SEC Says

D.E. Shaw & Co. will pay $10 million to settle a Securities and Exchange Commission probe that alleged the hedge fund’s agreements with employees could have made it harder for them to blow the whistle.

The Wall Street regulator claimed in its order that the New York-based quant giant made new hires sign employment agreements that ran afoul of agency rules designed to protect whistleblowers. The pacts placed broad restrictions on disclosing confidential information to outside parties, and didn’t carve out a specific exemption for whistleblowing, as the regulator prefers.

D.E. Shaw also required about 400 departing employees to sign ...