More than 200 former Securities and Exchange Commission (SEC) employees who left the agency between 2006 and 2010 have taken jobs representing clients before the Commission, according to a new Project On Government Oversight (POGO) report and database released today.
POGO’s SEC Revolving Door Database tracks employees who filed post-employment statements, which the SEC requires from former employees who plan to represent a client before the SEC within two years of leaving the agency. POGO obtained the statements through the Freedom of Information Act. From 2006 to 2010, 219 former employees filed post-employment statements 789 times.
The searchable database shows that some employees announced their intention to represent regulated clients within days of leaving the Commission.
“The revolving door to high-paying jobs representing Wall Street can undermine the integrity of the SEC,” said Michael Smallberg, the POGO investigator who created the database. “It’s not a stretch for the public to wonder whether the promise of future employment affects how SEC regulators treat certain firms.”
The new database sheds light on which firms are the biggest recruiters of SEC employees (ACA Compliance Group, Deloitte & Touche and Ernst & Young were the top three) and also exposes some shortcomings in the SEC enforcement of its ethics policies.
POGO found that the SEC’s enforcement of its post-employment rules is spotty—for instance, it appears at least three former employees who went to work in the financial sector never filed the required statements. Numerous statements also failed to mention whether the former SEC employee received ethics clearance.
POGO’s report calls for Congress and the SEC to strengthen and simplify post-employment restrictions. In light of the SEC’s well-documented failings in exposing the Madoff and Stanford Ponzi schemes and other oversight breakdowns, overhauling its ethics guidelines should be a top priority, said Smallberg. Some of the former SEC employees featured in POGO’s report have been involved in questionable acts examined by the SEC Office of Inspector General.
“The public must have confidence that the SEC is putting the interest of taxpayers and investors first,” Smallberg said.