The U.S. Securities and Exchange Commission on Monday charged a company and its chief executive with unlawfully trying to stop investors from reporting misconduct to federal regulators, an enforcement action that expands on whistleblower protection efforts that have been largely centered on employees.
In an amended complaint, filed in Manhattan federal district court, the SEC tacked on charges against the online auction portal Collectors Cafe and its CEO Mykalai Kontilai, who had been accused of making a fraudulent securities offering and misappropriating investors’ money. The SEC alleged that Collectors Cafe conditioned the return of money to investors who signed agreements that they would not report potential misconduct to the commission or other government agencies.
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