SEC 'Revolving Door' Under Review
June 16, 2010
By TOM MCGINTY
A Senate panel asked the Securities and Exchange Commission's inspector general to review the agency's "revolving door," which shuttles many SEC staffers into jobs with the companies they once regulated.
In a letter sent Monday, Sen. Charles Grassley (R., Iowa), the ranking minority member on the Senate Finance Committee, asked David Kotz, the inspector general, to review the recent departure of a top official in the SEC's Division of Trading and Markets who took a job with a prominent high-frequency trading firm.
That move coincided with a continuing SEC examination of how high-speed, computer-driven trading in stocks and other securities is affecting markets.
Mr. Grassley also cited a Wall Street Journal article in April that reported how many former SEC employees have quickly turned around and represented clients before the commission, sometimes within days of leaving the agency.
"We need to ensure that SEC officials are more focused on regulation and enforcement than on getting their next job in the industry they are supposed to oversee," Mr. Grassley said in a statement.
"The inspector general's work," said Mr. Grassley, "can be a valuable tool to help the SEC become more open and transparent about its employees' ties to the industry it regulates."
Mr. Kotz declined to comment. But in a response to Mr. Grassley on Tuesday, he revealed a new revolving-door investigation he has undertaken. Link to complete article
Link to April 5, 2010 Article
SEC Lawyer One Day, Opponent the Next
By TOM MCGINTY
The revolving door can turn swiftly at the Securities and Exchange Commission.
Steven Richards left the SEC in July 2008 as a top accountant in the enforcement division to join the global business advisory firm FTI Consulting. Five days later, he signed on to represent a client involved in a "nonpublic investigation" by his old division.
In August 2008, Andrew Dunbar left his job as an enforcement lawyer in the SEC's Los Angeles office to take a job with the law firm Sidley Austin. Eleven days later, he was tapped to help a client answer an "informal request for information" from the same office.
Mr. Dunbar didn't respond to requests for comment and Mr. Richards declined to comment, as did both of their employers.
The two ex-SEC men were among 66 former SEC employees who filed 168 letters with the SEC secretary in 2008 and the first nine months of 2009 disclosing clients or new employers they planned to represent before the agency, according to documents obtained through a public-records request. SEC regulations require such letters if a former employee represents a client before the agency within two years of leaving.
Grandpa: All those that believe "The mission of the U.S. Securities and Exchange Commission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation", please raise your hand.
Mary Schapiro, please sit down as you do not get to vote!
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