Sunday, June 27, 2010

Congress Finds Revolving Door

"A Senate panel asked the [SEC's] inspector general to review the agency's 'revolving door,' which shuttles many SEC staffers into jobs with the companies they once regulated. .... Mr. [Charles] Grassley also cited a Wall Street Journal article in April that reported how may 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. ... '[W]e are currently conducting an investigation of allegations very recently brought to our attention that a prominent law firm's siginificant ties with the SEC, specifically, the prevalence of SEC attorneys leaving the agency to join this particular law firm, led to the SEC's failure to take appropriate actions in a matter involving the law firm,' Mr. [David] Kotz said. ... Last week, Sen. Edward Kaufman (D., Del.) said that restriction doesn't go far enough. Congress or the SEC should consider banning employees from taking jobs with companies affected by rule making in which the staffers had a significant role during the prior year, Mr. Kaufman said in a statement", Tom McGinty at the WSJ, 16 June 2010, link:

So what? "Max" and "Jack", two former SEC staffers can just switch "clients" to avoid the conflict of interest rules. The SEC is hopeless. Only one law firm Kotz? Get real.


Anonymous said...

Maybe the law firms are the SEC "gatekeepers"?

Anonymous said...

It truly is interesting that there is such a clear and apparent conflict of interest with former SEC employees transitioning to representing companies within days of leaving and there is no concern. There truly should be more regulation as far as situations such as these are concerned, particularly when these companies have been affected by regulations made by these very same employees.

Independent Accountant said...

Anonymous 2:
What goes on at Treasury and the Fed is worse.