A two part feature published by Hedge Fund Legal & Compliance Digest on Aug. 4 and 11 outlines hedge funds’ best practices for developing internal whistleblower programs. Joel Wattenbarger (New York) explains that elements will be contingent on the adviser’s size, along with the nature of the firm’s business activities. Policies that “indicate clearly to employees that in the event they do become aware of an issue that they should raise it internally” will help employees seek other solutions to problems before they consider external ones, Mr. Wattenbarger noted. Upon receipt of a complaint, a firm should consider whether it is something that can be “addressed internally through an investigation by compliance staff or [if] … it [is] appropriate to bring external resources,” outlined Mr. Wattenbarger. Beyond a solid whistleblower policy, good internal HR policies are also important in determining appropriate, and cautious procedures for subsequent fair treatment of the employee.
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