SEC Report: Employees Browsed Porn, Ran Private Businesses

By GottaLaff

Get the kids out of the room:

The report, released the day after Thanksgiving, reveals that some employees at the [Securities and Exchange Commission ] were clearly preoccupied with matters other than their mission of "protecting investors and maintaining fair, orderly, and efficient markets." The semi-annual report to Congress, which covers the period from this past April to September, details among other things a handful of employees circumventing internal controls to download porn. Let’s pause for some detail:

[Investigators] uncovered evidence that an employee who was still in his probationary period had used his SEC laptop computer to attempt to access Internet websites classified as containing pornography, resulting in hundreds of access denials. The OIG investigation also disclosed that this employee successfully bypassed the Commission’s Internet filter by using a flash drive.

Presumably, that’s not the kind of initiative the SEC is looking for.

They don't call them "laptops" for nothing. Is that your flash drive, or are you just happy to see me?

There were also more serious misdeeds raised by the report. For example, there is the case of the senior-level commission employee who "clearly and purposefully identified herself as a Commission employee when dealing with brokers about a family member’s account," making the broker in question feel like she was trying to "intimidate and bully him." The OIG referred the matter to management for "disciplinary action, up to and including dismissal." By the end of the period covered in the report, management "had not proposed or taken action." [...]

Investigators found employees in separate offices operated private photography businesses out of the commission:

An employee repeatedly and flagrantly used Commission resources, including Commission Internet access, e-mail, telephone and printer, in support of his private photography business for several years.

[...] The report reveals also that two commission staffers employed as attorneys didn’t have active bar memberships. [...]

The IG also found that the commission did not have a sufficient system in place to "prevent and detect insider trading on the part of Commission employees or violations of the Commission’s rules."

The agency’s information management also comes in for criticism. An employee survey conducted by the inspector general revealed that employees failed to enter data into a computer system used to manage investigations. [...] The IG semi-annual report also reveals that the commission lacks "an inventory of its laptops and was unable to trace ownership of laptops to specific individuals."

Kinda takes the "security" out of Security and Exchange, doesn't it?

Go here for the 95-page document.

Mary Schapiro To Be Named SEC Pick Thursday

Pic via LOL Fed.

Mary Schapiro will be named tomorrow as Obama's pick to head the Securities and Exchange Commission.

Schapiro, who heads the Financial Industry Regulatory Authority, is well regarded and thought of as a tough regulator, but she could also be viewed as too much of an insider.

She has served under both Presidents Clinton and Bush, as chairman of the federal Commodity Futures Trading Commission (appointed in 1994) and in January of this year, was appointed by Bush to the President's Advisory Council on Financial Literacy.

She has also served on the SEC and headed the National Association Of Securities Dealers.