Posted Oct 28, 2011 10:47 pm CDT
Few would dispute that the Securities and Exchange Commission has missed some major frauds in recent decades, including the massive Ponzi scheme that Bernard Madoff operated under the guise of a hedge fund for years without executing a single trade.
But critics contend the pendulum has swung too far in the other direction under the current inspector general, H. David Kotz, reports Bloomberg.
He has orchestrated a “reign of terror” under which employees are fearful of doing their jobs, says Harvey Pitt, a former SEC chairman, in an email last month to nearly 100 other securities lawyers. “People are afraid to write anything down, make decisions or even take notes of telephone conversations, because the current IG monitors everyone’s e-mails, including the chairman’s, and starts investigations at the drop of a hat.”
A number of employees have also expressed concern, the news agency says.
However, Kotz, 45, says he works hard to be thorough, detailed and fair, and says his efforts have had a very positive impact on the SEC.
Supporters say he is a man of integrity who brought needed discipline to the agency, and no one likes a disciplinarian.