BlackRock will pay a $340,000 to settle charges brought by the Securities and Exchange Commission (SEC) that it improperly used separation agreements in which exiting employees were forced to waive their ability to obtain whistleblower awards.

BlackRock was represented by Colleen Mahoney at Skadden, Arps in Washington, D.C.

According to the SEC’s order, more than 1,000 departing BlackRock employees signed separation agreements containing language stating that they “waive any right to recovery of incentives for reporting of misconduct” in order to receive their monetary separation payments from the firm.

BlackRock added the waiver provision in October 2011 after the SEC adopted its whistleblower program rules, and the firm continued using it in separation agreements until March 2016.

“BlackRock took direct aim at our whistleblower program by using separation agreements that removed the financial incentives for reporting problems to the SEC,” said Anthony S. Kelly, Co-Chief of the SEC Enforcement Division’s Asset Management Unit.  “Asset managers simply cannot place restrictions on the ability of whistleblowers to accept financial awards for providing valuable information to the SEC.”

BlackRock consented to the SEC’s order without admitting or denying the findings that it violated Rule 21F-17.

The order notes that BlackRock voluntarily revised its separation agreement and took a number of remedial actions, including the implementation of mandatory yearly training to summarize employee rights under the SEC’s whistleblower program.