Legal Ethics
Two SEC Lawyers Being Probed for Insider Trading
Posted May 15, 2009, 06:08 am CST
By Debra Cassens Weiss
Two lawyers who worked for the Securities and Exchange Commission are being investigated by the FBI for insider trading, according to a report by the SEC inspector general.
The report alleges both lawyers, whose names were not released, traded stock in a large financial services company despite knowledge it was under investigation, CBS News reports. The lawyers still work at the SEC and make six-figure salaries, according to the report. They both deny wrongdoing.
The inspector general opened the probe after learning of a high volume of trades by the female lawyer, the story says. Both lawyers reportedly traded stock tips and information on SEC probes by e-mail and in weekly lunches, the story says.
When CBS caught up with inspector general David Kotz near his office, he declined a formal interview, but said: "The report talks about our concerns that there is no true compliance system at the SEC.”
One of the lawyers, a male, worked in the office of the SEC’s chief counsel and had access to “a tremendous amount of nonpublic information,” according to the report obtained by CBS. He reportedly advised his brother and sister-in-law on stock purchases using his SEC e-mail.
The other lawyer, a female, worked in the SEC’s enforcement division. The report claims she sold stock in an oil company two days before a colleague in the office next to her opened an investigation, the story says.
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