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Report questions impartiality of US Securities and Exchange Commission

(Agencies)
Updated: 2008-10-08 09:28

A federal inquiry has concluded that the US Securities and Exchange Commission should consider disciplining its director of enforcement and two supervisors for their role in handling an insider trading investigation, The New York Times said citing an obtained report.

From left, Treasury Secretary Henry Paulson, Federal Reserve Chairman Ben Bernanke,Securities and Exchange Commission (SEC) Chairman Christopher Cox, and Federal Housing Authority Director James Lockhart, testify on Capitol Hill in Washington, Tuesday, Sept. 23, 2008, before the Senate Banking Committee for a hearing on the credit market turmoil. [Agencies]

The insider trading investigation led to the firing of a SEC lawyer for trying to interview an influential Wall Street executive, the paper said.

The commission's inspector general, H. David Kotz, said in a 191-page report that he had found evidence that "raised serious questions about the impartiality and fairness" of the SEC's investigation of possible insider trading at Pequot Capital Management, according to the paper.

Kotz also condemned what he called the "common practice" of giving outside lawyers' clients access to high-level SEC officials when they had complaints about front-line investigators, the paper said.

The SEC did not immediately return a call seeking comment.