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Project on Government Oversight

SEC's Response to Inspector General Recommendations for Disciplinary Action

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July 22, 2011

Employees at the Securities and Exchange Commission (SEC) are supposed to maintain "unusually high standards of honesty, integrity, impartiality and conduct" as they carry out the agency's mission to protect U.S. investors. Yet the SEC's Office of Inspector General (OIG) has uncovered many instances in which SEC employees have fallen short of these standards by giving preferential treatment to the SEC's regulated entities, disclosing or trading on non-public information, retaliating against whistleblowers, and abusing their position of authority, just to name a few.

In cases of serious misconduct, the OIG often recommends that the SEC take disciplinary action against the employees and contractors who have violated federal laws and/or SEC rules. However, rarely do OIG investigative reports see the light of day, and whether they do or not, the SEC often drags its feet in implementing the OIG's recommendations, or it ignores the recommendations altogether.

POGO wrote to SEC Chairman Schapiro in late 2009 to raise concerns about the SEC's slow response to the OIG’s recommendations. A few months ago, Chairman Schapiro provided House Oversight and Government Reform Committee Chairman Darrell Issa with updated information on the SEC's response to the OIG's specific recommendations for disciplinary action.

In order to enhance the public's oversight of the SEC, POGO has created the following table with updated information on the SEC's response to OIG disciplinary recommendations. The table incorporates information from Chairman Schapiro's latest letter, as well as information from the OIG's investigative reports and semiannual reports to Congress. We've also included direct links to any OIG investigative reports that have been released to the public through the Freedom of Information Act.

In some cases, the SEC and OIG have not yet made publicly available the specific recommendations from the OIG's reports; these cases are marked with "not publicly available." Click on any column heading to sort the chart ascending to descending.

Updated July 22, 2011

 

Date of OIG Report
Title of OIG ReportEmployee TitleOIG RecommendationAction Taken by the SEC
01/20/2011 OIT Contract Employees Given Access to SEC Buildings and Computer Systems for Several Weeks before Background Investigation Clearance (OIG-544) Project Manager Not publicly available Pending
01/20/2011 OIT Contract Employees Given Access to SEC Buildings and Computer Systems for Several Weeks before Background Investigation Clearance (OIG-544) Contractor Not publicly available Pending
01/13/2011 Misuse of Government Computer Resources and Official Time (PI-11-07) Senior Counsel Not publicly available Pending
01/11/2011 Misuse of Government Computer Resources and Official Time (PI-11-05) Senior Attorney Not publicly available Resigned prior to completion of OIG report
01/6/2011 Misuse of Government Computer Resources and Work Time (PI-11-06) Contractor Not publicly available Removed from contract
12/28/2010 Falsification of Time and Attendance Records, Abuse of Telework and Lack of Supervisory Review (PI-10-05) Associate Director Not publicly available Pending
12/28/2010 Falsification of Time and Attendance Records, Abuse of Telework and Lack of Supervisory Review (PI-10-05) Case Management Specialist Not publicly available Pending
12/14/2010 Improprieties in the Selection of Information Technology and the Award of a Sole-Source Contract (OIG-523) Deputy Director Not publicly available Pending
12/14/2010 Improprieties in the Selection of Information Technology and the Award of a Sole-Source Contract (OIG-523) Assistant Director Not publicly available Pending
12/14/2010 Improprieties in the Selection of Information Technology and the Award of a Sole-Source Contract (OIG-523) Contract Specialists (2) Not publicly available Pending
11/23/2010 Improper Travel Expenditures and Lack of Supervisory Review (PI-09-113) Branch Chiefs (2) Not publicly available Pending
11/10/2010 Abusive and Intimidating Behavior Within the Securities and Exchange Commission Security Branch, Inappropriate Personal Relationship Between Security Specialist and Contractor Employee, and Inadequate Management of Security Branch (OIG-537) Contractor Not publicly available Pending
11/10/2010 Abusive and Intimidating Behavior Within the Securities and Exchange Commission Security Branch, Inappropriate Personal Relationship Between Security Specialist and Contractor Employee, and Inadequate Management of Security Branch (OIG-537) Chief of the Security Branch Not publicly available Pending
11/10/2010 Abusive and Intimidating Behavior Within the Securities and Exchange Commission Security Branch, Inappropriate Personal Relationship Between Security Specialist and Contractor Employee, and Inadequate Management of Security Branch (OIG-537) Security Specialist Not publicly available Pending
10/26/2010 Investigation of the Failure of the SEC's LARO to Uncover Fraud in Westridge Capital Management Notwithstanding Investment Adviser Examination Conducted in 2005 and Inappropriate Conduct on Part of Senior Los Angeles Official (OIG-533) Assistant Regional Director Assistant Regional Director should not be placed back in a supervisory role in the LARO Resigned
10/26/2010 Investigation of the Failure of the SEC's LARO to Uncover Fraud in Westridge Capital Management Notwithstanding Investment Adviser Examination Conducted in 2005 and Inappropriate Conduct on Part of Senior Los Angeles Official (OIG-533) Certain LARO examination staff Appropriate action (which may include appropriate performance-based action) on an employee-by-employee basis Pending
10/22/2010 Misuse of Government Computer Resources and Official Time (OIG-547) Staff Accountant Not publicly available Pending
09/30/2010 Memorandum Report: Improper Pre-Selection of Contractor Associate Executive Director Not publicly available No action taken
09/8/2010; Supp. 11/23/2010 Alleged Misrepresentation of Identity and Lack of Bar Membership by Chicago Regional Office Staff Attorney (OIG-541) Staff Attorney Disciplinary action, up to and including dismissal Resigned in lieu of disciplinary action
09/1/2010 Corporation Finance Attorney Suspended from State Bars, Misrepresented Bar Status, Lacked Candor, Abused Full-Time Telework Medical Accommodation and Leave and Engaged in Conflicts of Interest (OIG-520) Attorney Advisor Disciplinary action, up to and including removal Pending
08/9/2010 Enforcement Attorney Engaged in Prohibited Political Activity (PI-10-54) Attorney Referred the matter to the Office of Special Counsel's Hatch Act Unit for further review of the violation and appropriate disciplinary action No action taken; the Office of Special Counsel has sole jurisdiction to pursue violations of the Hatch Act; OSC did not take action because employee withdrew from election
07/9/2010 Misuse of Government Computer Resources and Work Time (PI-10-59) Contractor Disciplinary action Removed from contract
06/29/2010 Appearance of Impropriety With Respect to Acts Affecting a Personal Financial Interest (PI-09-04) Branch Chief Appropriate remedial action, including that the Branch Chief resign from his position as a member of the investment committee No action taken; employee retired
06/10/2010 Unprofessional Conduct by Supervisor While Conducting an Investment Adviser Examination (OIG-530) Branch Chief Appropriate disciplinary action Resignation prior to issuance of OIG report
04/30/2010 Misuse of Computer Resources and Official Time (PI-10-30) Disclosure Assistant Disciplinary action, up to and including removal 30-day suspension
04/30/2010 Misuse of Computer Resources and Official Time (PI-10-31) Human Resources Specialist Disciplinary action, up to and including removal Resigned in lieu of termination
04/30/2010 Misuse of Computer Resources and Official Time (PI-10-32) Legal Instrument Examiner Disciplinary action, up to and including removal 30-day suspension
03/31/2010 Investigation of the SEC's Response to Concerns Regarding Robert Allen Stanford's Alleged Ponzi Scheme (OIG-526) Certain Enforcement and Office of Compliance Inspections and Examinations staff Appropriate action (which may include performance-based action, where appropriate) on an employee-by-employee basis to ensure that future decisions about when to open an investigation and when to recommend that the Commission take action are made in a more appropriate manner Pending
03/29/2010 Allegations of Inappropriate and Unprofessional Conduct by a Current SEC Employee and Unauthorized Computer Access by a Former SEC Employee (OIG-508) Branch Chief Disciplinary action Counseling
03/8/2010 Misuse of Computer Resources (PI-10-20) Attorney Advisor Disciplinary action Counseling
03/8/2010 Misuse of Computer Resources (PI-10-21) Attorney Advisor Disciplinary action Reprimand
03/8/2010 Misuse of Computer Resources (PI-10-22) Attorney Advisor Disciplinary action 30-day suspension
02/26/2010 Failure to Timely Investigate Allegations of Financial Fraud (OIG-505) Enforcement Staff Appropriate action (which may include performance-based action, as appropriate) on an employee-by-employee basis to ensure that future complaints are better handled and that the mistakes outlined in the report are not repeated Two employees received counseling; management discussed issues with working-group to ensure future tips are reviewed in a timely manner
01/12/2010 Unauthorized Disclosure of Non-Public Information (OIG-512) Staff Attorneys (2) Disciplinary action Counseling as to both
12/17/2009  Misuse of Government Resources and Official Time at Headquarters (OIG-517) Procurement Analyst Disciplinary action, up to and including dismissal 30-day suspension
11/24/2009 Disclosure of Non-Public Procurement Information and Lack of Candor at Headquarters (OIG-515) Contractor Disciplinary action, up to and including removal from the contract No action taken
11/24/2009 Disclosure of Non-Public Procurement Information and Lack of Candor at Headquarters (OIG-515) Branch Chief Disciplinary action, up to and including removal Reduction in pay and grade
09/30/2009 Misuse of Government Computer Resources and Violation of the Standards of Ethical Conduct for Employees (OIG-504) Support Services Supervisor Would have recommended serious disciplinary action, including termination, had the Supervisor not retired shortly after the investigation began; OIG recommended that the SEC pursue revocation of benefits, including a $25,000 payment; also referred the matter to DOJ, which declined prosecution Employee retired prior to completion of OIG report
09/30/2009 Misuse of Position, Government Resources and Official Time in Denver Regional Office and Home Office (OIG-519) Senior Special Counsel Disciplinary action, up to and including dismissal 14-day suspension and mandatory ethics training
09/30/2009 Misuse of Position, Government Resources and Official Time in Denver Regional Office and Home Office (OIG-519) Research Specialist Disciplinary action Counseling
09/25/2009 Violation of Standards of Ethical Conduct in Regards to Official Government Travel (OIG-494B) Associate Director Disciplinary action Reprimand
09/15/2009 Allegations of Retaliatory Personnel Actions (OIG-494A) Associate Director Performance-based or disciplinary action No action taken
09/15/2009 Allegations of Retaliatory Personnel Actions (OIG-494A) Regional Office Director Performance-based or disciplinary action No action taken
08/31/2009 Investigation of Failure of the SEC To Uncover Bernard Madoff's Ponzi Scheme (OIG-509) Certain Office of Compliance Inspections and Examinations and Enforcement staff Appropriate action (which may include performance-based action, as appropriate) taken, on an employee-by-employee basis, to ensure that future examinations and investigations are conducted in a more appropriate manner and that the mistakes and failures outlined in this ROI are not repeated Pending
08/5/2009 Misuse of Government Computer Resources and Official Time (OIG-08-37) Information Technology Specialist Disciplinary action Counseling
07/9/2009 Misuse of Government Computer Resources and Official Time at the Atlanta Regional Office (OIG-506) Supervisory Staff Accountant Disciplinary action, up to and including dismissal 5-day suspension
07/9/2009 Possession of a Dangerous Weapon in a Federal Facility by Division of Enforcement SK-14 Employee (OIG-514) Assistant Chief Accountant Disciplinary action, up to and including dismissal 30-day suspension and signed an agreement providing for abridged disciplinary process in the event of future misconduct; resigned prior to serving entire suspension
07/1/2009 Misuse of Government Computer Resources and Official Time (PI-08-39) Legal Instruments Examiner Disciplinary action Counseling
06/24/2009 Misuse of Government Computer Resources and Official Time (PI-09-76) Assistant Director Appropriate disciplinary action No action taken
06/16/2009 Misuse of Government Computer Resources and Official Time (PI-09-83) Contractor Disciplinary action Warning
06/16/2009 Misuse of Government Computer Resources and Official Time (PI-09-84) Contractor Not publicly available Warning
06/15/2009 Misuse of Government Computer Resources and Official Time (PI-09-85) Contractor Disciplinary action Removed from contract
06/12/2009 Misuse of Government Computer Resources and Official Time (PI-09-80) Contractor Disciplinary action Not publicly available
06/8/2009 Misuse of Government Computer Resources and Official Time (PI-09-82) Branch Chief Disciplinary action Written reprimand and donation of 8 hours of annual leave to leave bank
06/5/2009 Misuse of Government Computer Resources and Official Time (PI-09-81) Information Technology Specialist Disciplinary action 1-day suspension
03/30/2009 Disclosure of Nonpublic Information (OIG-501) Staff Attorney Disciplinary action Counseling received prior to completion of OIG report; no action taken thereafter
03/18/2009 Abuse of Time and Attendance by SK-12 Employee of the Division of Investment Management (OIG-492) Financial Analyst Disciplinary action, up to and including dismissal Termination
03/17/2009  Allegations of Perjury and Obstruction of Justice by Former SEC Enforcement Attorney (OIG-477) Administrative Contact Appropriate disciplinary action Counseling
03/5/2009 Appearance of Lack of Partiality in the Performance of Official Duties (OIG-499) Assistant Director Appropriate disciplinary action Reprimand
03/3/2009 Employees' Securities Transactions Raise Suspicions of Insider Trading and Create Appearances of Impropriety; Violations of Financial Reporting Requirements; and Lack of SEC Employee Securities Transactions Compliance System (OIG-481) Attorneys (2) Appropriate disciplinary action; also referred the matter to the USAO Pending
12/15/2008 Violation of D.C. Metropolitan Police Security Officers Management Branch Rules, Improper Issuance of Waiver from Contractual Requirements and Other Inappropriate Conduct Involving Commission Security Operations (OIG-495) Contractor Appropriate action, up to and including removal from contract Removed from contract
12/15/2008 Violation of D.C. Metropolitan Police Security Officers ManagementBranch Rules, Improper Issuance of Waiver from Contractual Requirementsand Other Inappropriate Conduct Involving Commission Security Operations (OIG-495) Security Specialist Disciplinary action Reprimand
12/12/2008 Misuse of Government Computer Resources and Official Time (PI-09-19) Contractor Disciplinary action Removed from contract
12/12/2008 Misuse of Government Computer Resources and Official Time (PI-09-20) Contractor Disciplinary action Removed from contract
12/12/2008 Misuse of Government Computer Resources (PI-09-21) Contractor Disciplinary action Removed from contract
12/12/2008 Misuse of Government Computer Resources and Official Time (PI-09-25) Staff Accountant Disciplinary action Counseling
11/26/2008 Misuse of Government Computer Resources and Official Time at Los Angeles Regional Office (OIG-503) Assistant Regional Director Disciplinary action, up to and including dismissal Reprimand; employee has since resigned
11/7/2008 Misuse of Government Resources and Official Time at Headquarters (OIG-488) Information Technology Specialist Disciplinary action 9-day suspension
09/30/2008 Re-Investigation of Claims by Gary Aguirre of Improper Preferential Treatment and Retaliatory Termination (OIG-431) Division Director

Appropriate disciplinary and/or performance-based action against the senior-level Enforcement official who made the ultimate decision to terminate Aguirre

An Administrative Law Judge determined formal disciplinary action was not appropriate
09/30/2008 Re-Investigation of Claims by Gary Aguirre of Improper Preferential Treatment and Retaliatory Termination (OIG-431) Assistant Director Appropriate disciplinary and/or performance-based action, including removal of supervisory responsibilities Retired
09/30/2008 Re-Investigation of Claims by Gary Aguirre of Improper Preferential Treatment and Retaliatory Termination (OIG-431) Branch Chief Appropriate disciplinary and/or performance-based action, including removal of supervisory responsibilities An Administrative Law Judge determined formal disciplinary action was not appropriate
09/30/2008 Failure to Vigorously Enforce Action Against W. Holding and Bear Stearns at the Miami Regional Office (OIG-483) Regional Office Director Disciplinary and/or performance-based action No action
09/11/2008 Investigation of Failure to Maintain Active Bar Status Enforcement attorney Would have recommended disciplinary action, up to and including dismissal, had the employee not resigned; also referred to USAO, which declined prosecution Resigned before the OIG referred its report to management
08/14/2008 Misuse of Government Resources and Official Time (OIG-479) Contractor Action to remind contractor about proper use of government equipment Written counseling
08/12/2008 Misuse of Official Government Position (OIG-480) Acting Secretary/Deputy Secretary Disciplinary action, up to and including dismissal Reprimand
08/12/2008 Misuse of Government Resources and Official Time (OIG-497) Attorney Advisor Appropriate disciplinary action Reprimand
08/4/2008 Misuse of Government Resources, Appearance of Conflict of Interest and Lack of Candor at the Chicago Regional Office (OIG-457) Senior Attorney Appropriate disciplinary action Counseling
07/30/2008 No Merit to Complaint of Orders to Falsify a Government Record and Need to Address Personnel Issues in the Security Branch (OIG-490)
Security Branch Management should take prompt and effective measures to address the personnel situation No measures required because staff member at issue resigned
07/24/2008 Misuse of Government Resources and Official Time (OIG-464) Market Surveillance Specialist Disciplinary action, up to and including dismissal 9-day suspension
07/18/2008 Misuse of Government Resources and Official Time at Headquarters (OIG-476) Document Information Assistant Disciplinary action, up to and including dismissal 14-day suspension
07/9/2008  Misuse of Government Computer Resources and Official Time at Chicago Regional Office (OIG-484) Securities Compliance Examiner Disciplinary action, up to and including dismissal Resigned in lieu of termination
07/2/2008 Misuse of Government Computer Resources and Official Time (PI-08-49) Contractor Disciplinary action Removed from contract
07/1/2008 Misuse of Government Computer Resources and Official Time (PI-08-48) Human Resources Specialist Disciplinary action Counseling
06/24/2008 Falsification of Employment Application and Personnel Forms (OIG-493) Program Analyst Disciplinary action, up to and including dismissal Termination
06/5/2008 Conflict of Interest, Improper Solicitation, and Receipt of Gifts from a Prohibited Source, Misuse of Official Position and Other Misconduct (OIG-469) Deputy Chief Information Officer Disciplinary action No action taken
06/5/2008 Conflict of Interest, Improper Solicitation, and Receipt of Gifts from a Prohibited Source, Misuse of Official Position and Other Misconduct (OIG-469) Branch Chief Disciplinary action, up to and including dismissal Resigned
04/30/2008 Misuse of Government Computer Resources and Official Time at NYRO (OIG-468) Staff Accountant Disciplinary action, up to and including dismissal 14-day suspension
03/31/2008 Perjury in Official EEO Investigation (OIG-447) Office of Human Resources Supervisor Referred to Public Integrity Section for consideration of criminal prosecution; also would have recommended serious disciplinary action had the employee not resigned before the investigation was complete Resigned
03/27/2008 Misrepresentation of Professional Credentials and Misuse of Government Computer Resources and Official Time at Headquarters (OIG-465) Staff Accountant Disciplinary action, up to and including dismissal; also referred to USAO, which declined prosecution 3-day suspension
03/25/2008 Misuse of Government Computer Resources and Official Time (OIG-473) Senior Counsel Disciplinary action, up to and including dismissal 10-day suspension
03/25/2008; Supp. 05/23/2008 Misuse of Government Parking Permit (OIG-456) Program Management Specialist Disciplinary action, up to and including dismissal; also referred to USAO, which declined prosecution Termination
03/13/2008 Abuse of Time and Attendance at the New York Regional Office (OIG-466) Program Analyst Disciplinary action, up to and including dismissal; also referred to USAO, which declined prosecution Resigned in lieu of termination; reimbursed agency for amounts received during unauthorized absence from duty
03/11/2008 Misuse of Government Computer Resources and Official Time (PI-08-24) Attorney Advisor Not publicly available Resigned
03/11/2008 Misuse of Government Computer Resources and Official Time (PI-08-25) Staff Accountant Not publicly available Reprimand
02/13/2008 Misuse of Government Computer Resources (PI-08-16) Confidential Assistant Not publicly available Counseling
01/31/2008 Misuse of Government Computer Resources and Official Time (PI-08-13) Attorney Advisor Not publicly available Counseling
01/30/2008 Misuse of Government Computer Resources and Official Time (PI-08-14) Human Resources Specialist Not publicly available Counseling
01/30/2008 Misuse of Government Computer Resources and Official Time (PI-08-15) Legal Instruments Examiner Not publicly available Counseling
01/23/2008 Misuse of Government Computer Resources and Official Time (OIG-462) Staff Accountant Disciplinary action, up to and including dismissal Resigned in lieu of termination
12/31/2007; Supp. 06/2/2008 Disruptive Act at the Workplace; Intimidating and Controlling Behavior; Lack of Candor (OIG-472) Associate Director/Chief Counsel Disciplinary action, up to and including dismissal The Associate Director/Chief Counsel was removed from Chief Counsel position and received counseling
12/31/2007; Supp. 06/2/2008 Disruptive Act at the Workplace; Intimidating and Controlling Behavior; Lack of Candor (OIG-472) Assistant Chief Counsel Disciplinary action Counseling

Sources:

Letter from SEC Chairman Mary Schapiro to Representative Darrell Issa, January 31, 2011; SEC OIG semiannual reports to Congress; and OIG investigative reports obtained by POGO and others through the Freedom of Information Act

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