The US Securities and Exchange Commission has forced HomeStreet, a Seattle financial company, to pay it 500,000 to settle charges that it conducted improper hedge accounting and later took steps to hamper its employees from telling the regulator.

The SEC’s order further finds that after HomeStreet employees reported concerns about accounting errors to their managers, the company concluded that the adjustments to its hedge effectiveness tests were incorrect. When the SEC asked the company in April 2015 for documents related to hedge accounting, HomeStreet presumed that it responding to a complaint from an employee and began a witch hunt for the 'whistleblower.'  It was suggested to one individual considered to be a whistleblower that the terms of an indemnification agreement could allow HomeStreet to deny payment for legal costs during the SEC’s investigation. HomeStreet also required former employees to sign severance agreements waiving potential whistleblower awards or risk losing their severance payments and other post-employment benefits.