“There’s a bloated portfolio and assets under management that don’t really exist. ... And investors are subscribing and redeeming based on those net asset values,” a TCA employee said.
Grant Thornton LLP, TCA’s auditor, raised questions last year about some of the fund’s 2018 figures, the employees said in their whistle-blower report. The auditor issued a qualified opinion, listing assets on the fund’s balance sheet that it considered questionable, the employees said.
The three employees alerted top TCA executives and its board to their allegations on January 7. They are on paid leave as protected whistle-blowers under the Dodd-Frank Act.
Yesterday, the SEC gave monetary awards to two whistle-blowers in separate enforcement investigations for information “that helped regulators shut down two separate fraudulent schemes preying on retail investors,” the agency said in a press release.
In the first action, the whistle-blower alerted the agency to a fraudulent scheme. The SEC awarded the whistle-blower more than $277,000. In the second action, the whistle-blower, a harmed investor, provided critical information that enabled the SEC staff to recover assets that were later returned to victims. The SEC awarded the whistle-blower $45,000.
“Both whistle-blowers awarded today played a crucial role in helping the commission protect Main Street investors,” said Jane Norberg, chief of the SEC’s Office of the Whistleblower. “The information provided saved the SEC time and resources in conducting the investigations and assisted the SEC in returning money to harmed investors.”
The SEC has awarded approximately $387 million to 72 individuals since issuing its first award in 2012. All payments are made out of an investor protection fund established by Congress that is financed entirely through monetary sanctions paid to the SEC by securities law violators.
Whistle-blower awards can range from 10% to 30% of the money collected when the monetary sanctions exceed $1 million.