The former internal watchdog for the U.S. Securities and Exchange Commission violated ethics rules by overseeing investigations that touched on people with whom he had “personal relationships,” an outside review found.
The U.S. Securities and Exchange Commission’s internal watchdog has come under scrutiny for comments he made in a 75-minute videotaped interview about the agency and the stock market to a man who markets a “crash-proof retirement” plan through the Internet and a paid radio program.
Investigations criticizing the Securities and Exchange Commission’s failure to catch the Bernard Madoff and R. Allen Stanford frauds may be thrown into question by allegations of misconduct and conflicts of interest inside the office of the agency’s internal watchdog.
Securities and Exchange Commission Chairman Mary Schapiro authorized hiring a chief compliance officer and will require employees get “pre-clearance of all trades” and be prohibited from trading securities of issuers under investigation, amid a probe by federal prosecutors into trading by two agency lawyers.
The U.S. Securities and Exchange Commission’s internal watchdog said he found no evidence a lawsuit against Goldman Sachs Group Inc. was driven by politics or that agency officials timed the case to help President Barack Obama win support for financial-regulation legislation.