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US Securities and Exchange Commission (SEC) internal watchdog suspended for seven days after a misconduct finding-records uncovered

Reuters reports that on Feb. 2 in Washington, DC, Reuters reported that the U.S. economy was growing at an annual rate of After an independent government committee recommended that the Securities and Exchange Commission (SEC) consider firing Carl Hoecker for “serious misconduct,” the SEC suspended him for seven days without pay in 2020.

After a government investigation, first reported by Reuters in December, found that Hoecker abused his authority by conducting a “remarkably biassed and flawed” internal investigation into allegations against two of his employees, the SEC documents provide new details on how the agency responded. In order to obtain the SEC documents, Reuters made public records request to the agency.

The Integrity Committee, a federal panel that investigates allegations of wrongdoing against inspectors general, led the government investigation into Hoecker from 2017 to 2019, after two whistleblowers claimed he conducted a substandard investigation. Inspectors general are the government’s watchdogs, ensuring that taxpayer money isn’t mishandled.

SEC, which received the Integrity Committee’s report on Hoecker in 2019, also found Hoecker guilty of misconduct, according to previously unreported documents. While conducting an active investigation, he failed to avoid the appearance of bias and used “poor judgment” in contacting a witness.

US Securities and Exchange Commission (SEC) internal watchdog suspended for seven days after a misconduct finding-records uncovered

According to the documents, which include Hoecker’s time-sheets, the SEC concluded that he failed “to report allegations of improper conduct pursuant to the SEC’s policy of preventing harassment.”

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Hoecker was recommended for firing by the SEC’s Integrity Committee but Commissioners decided to suspend him from May 24-June 2, 2020, according to records. Hoecker was making about $277,000 a year at the time.

No comment was made by Hoecker or his attorney regarding disciplinary action, which he vehemently denies.

According to a December email from Hoecker to his staff, “I am always striving for perfection.” “as well as the underlying…Integrity Committee report, I cannot comment on any willful or negligent inaccuracies and omissions.”

According to the Integrity Committee, the SEC’s response to the report was non-committal. Requests for comment from the SEC Office of Inspector General went unanswered.

Requests for comment from Jay Clayton, SEC chair at the time of Hoecker’s disciplinary action, were not answered.

To three disciplinary lawyers, a seven-day unpaid suspension sounded excessive in light of the committee’s findings and its recommendation that the SEC consider removing Hoecker.

US Securities and Exchange Commission (SEC) internal watchdog suspended for seven days after a misconduct finding-records uncovered

Federal Practice Group co-founder Debra D’Agostino thought it was strange that the agency would let him off with just disciplinary action. “It seems odd to me,” she said.

John Berry, an attorney specializing in disciplinary action defenses, called Hoecker’s “big break.”

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The SEC has the ability to sack its inspector general if two-thirds of its current commissioners agree and the agency notifies Congress of the reason at least 30 days in advance.

“I hope you still have faith in me as your IG,” Hoecker wrote in an email. I’ve been working here for nearly nine years now, and I intend to stay for a long time to come.”

Sarah N. Lynch and Chris Prentice contributed to the reporting, while Michelle Price and Edward Tobin edited the final product.

These are the Thomson Reuters Trust Principles that guide all of our work.

James Carter
James Carter
Coffee is my favourite thing to drink. I also love meeting new people and discussing the world. I'm your go-to guy if you want to learn more about anything, especially if you're wanting to get the latest info about your favourite celebs.
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