Two employees of the Securities and Exchange Commission are under investigation for allegations of insider trading, having been accused of trading the shares of a key financial firm despite the firm being under SEC investigation at the time.
According to sources with CBS News, the two employees are both lawyers; one works in the Office of the SEC’s Chief Counsel, which has access to significant nonpublic information that would be key in playing the market. The other works in the regulator’s enforcement division.
One attorney may have sent e-mails to his siblings that recommended the purchase of certain stocks, violating SEC rules.
The investigation is still purely speculative, said an SEC spokesperson in explaining the report. “We take seriously even the suggestion that any SEC employee would engage in insider trading. We note that the inspector general report neither accuses any SEC employee of insider trading nor concludes that any such conduct took place.”
Iowa Senator Charles Grassley (R) expressed his outrage over the potential violations, saying, “We ought to be outraged if there is one [piece of] insider trading information that’s leading to personal profit…It’s hard to imagine a more serious violation of the public trust thanfor the agency responsible for protecting investors to allow itsemployees to profit from non-public information about its enforcementactivities.”