SEC's Response to Inspector General Recommendations for Disciplinary Action

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.