On January 16, 2025, the SEC announced it had reached a settlement (Order) in an enforcement action against hedge fund managers Two Sigma Investments LP and Two Sigma Advisers LP (collectively, Two Sigma). The SEC accused the advisers of failing to act on internal information that employees brought to their attention concerning improper employee access to daily live trading algorithms; to reasonably supervise their personnel; and to maintain policies and procedures that would have resolved such issues promptly. The SEC also alleged violations of the Securities Exchange Act of 1934 whistleblower provisions relating to disclosures that departing employees had to make about whether they had made complaints to regulators. Though legal experts broadly concur on the need for robust whistleblower protections, the SEC has, in the view of some, aggressively enforced whistleblower protections in recent years without always providing detailed guidance to help fund managers grasp what practices are or are not legal when it comes to separation agreements. To understand the issues at the heart of the SEC’s enforcement action against Two Sigma, and to draw lessons regarding compliance best practices, this article outlines the Order and presents key takeaways from the case. See “SEC and CFTC Whistleblower Reports Reflect Continuing Vitality of Programs” (Jan. 16, 2025).