The Securities and Exchange Commission (SEC) has been dragging its feet on 224 recommendations (over 60%) made by the Office of Inspector General (OIG) since December 2007, as the Project On Government Oversight (POGO) revealed in a letter sent today to SEC Chairman Mary Schapiro.
Documents obtained by POGO through a Freedom Of Information Act request show that hundreds of OIG recommendations have gone unimplemented over the last two years. The documents call into question the SEC’s commitment to reform following the agency’s failure to detect the Bernie Madoff Ponzi scheme. And as Congress debates giving the SEC new regulatory responsibilities, the documents show that the SEC is struggling to address a host of systemic problems that are preventing the agency from fulfilling its current duties.
“For an agency that’s recovering from the worst failure in its history, the SEC’s decision to ignore so many of the Inspector General’s recommendations is simply astonishing,” said POGO Executive Director Danielle Brian. POGO is calling on Chairman Schapiro and the SEC leadership to set aside the necessary resources to fully implement the OIG’s most urgent recommendations.
The first document obtained by POGO shows that the SEC has taken “no action” on 27 of 52 recommendations made by the OIG in its reports of investigation since December 2007. According to the document, the SEC has decided to ignore some of the OIG’s most serious discoveries of misconduct.
The second document shows that 197 of the 312 recommendations made in the OIG’s audits since December 2007 are still listed as “pending.” Including recommendations from the OIG’s audits on the Madoff case.
“If SEC officials are serious about protecting investors from the next Madoff, this long list of unimplemented recommendations should serve as a wake-up call and a roadmap for reform,” Danielle Brian said.