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September 26, 2011

POGO on SEC Conflict of Interest Allegations

POGO has a summary of the conflict of interest allegations against Former SEC General Counsel David Becker. Here's an excerpt:

This isn’t the first time the OIG has cited SEC employees for misconduct in cases where the employees received advice from the Ethics Office. For instance, in its report on alleged insider trading by SEC employees —which was also referred to the Justice Department —the OIG reported that the employees sought approval from the Ethics Office for most of the trades that later aroused suspicion.

This also isn’t a problem that’s unique to the SEC. POGO has highlighted several instances in which it appears that ethics officials at the Bureau of Land Management did not take appropriate action or provide knowledgeable advice when confronted with revolving door and conflict-of-interest issues.

We’re glad to see that the SEC has recently taken measures to improve its ethics program. At last week’s National Government Ethics Conference , SEC officials highlighted the release of an online searchable ethics handbook , the agency-wide ethics emails that are now being distributed twice a week , and a new online, real-time database in which SEC staff are required to report their financial holdings and pre-clear securities transactions. The OIG also recommended that the SEC Ethics Counsel should report directly to the Chairman rather than the General Counsel, and that the SEC Ethics Office should take all necessary steps to ensure that its advice is “well-reasoned, complete, objective, and consistent” and “documented in an appropriate and consistent manner.”

Along these lines, the Government Accountability Office (GAO) recently recommended that the SEC Chairman “establish standards for documentation of ethics advice.” We made a similar recommendation in our report on the SEC revolving door.

Posted by IEC Team Leader in Issues: Conflicts of Interest | Permalink