WASHINGTON, May 8 (Reuters) - The Securities and Exchange Commission is hiring an outside investigator to look into
allegations of misconduct by current and former employees in the
SEC's Office of the Inspector General, agency spokesman John
The allegations, which were reported by Bloomberg on Monday,
come to light as the SEC continues its search for a new
inspector general after its former watchdog David Kotz departed
Nester would not discuss any details about the allegations
of misconduct, which he said had been raised by "an individual."
He said the SEC had also referred the matter to the Council
of Inspectors General on Integrity and Efficiency, or CIGIE, a
government council that monitors the work of 73 inspectors.
This is not the first time the SEC's inspector general's
office has faced complaints.
In December, Reuters reported that two SEC employees filed
formal complaints against Kotz in 2011, alleging he bullied
witnesses and twisted facts to build a case against them.
Kotz was known as an aggressive inspector general, who
probed everything from the agency's failure to catch convicted
Ponzi swindler Bernard Madoff to bungled SEC contracts and even
pornography-watching by agency employees.
But many of his critics say his hard-hitting tactics also
helped to fuel a culture of fear within the agency.
In addition to the complaints reported by Reuters, Bloomberg
also previously reported about concerns of potential conflicts
of interest after Kotz did a sit-down interview with a financial
adviser who markets a "crash-proof retirement plan" through the
Internet and a paid radio show.
The adviser later sold Kotz three tickets to a sold-out
football game, B loomberg said.
Kotz's departure from the SEC earlier this year took many by
He now works at Gryphon Strategies, a private investigative
He was not immediately available to comment on the latest
allegations of misconduct out of the inspector general's office.
Since he left, deputy inspector general Noelle Maloney has
been serving as interim inspector general while the SEC searches
for a replacement.
She did not immediately respond to a request for comment.
(Reporting by Sarah N. Lynch)
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