SEC Boss Schapiro Voices “Disgust” With Agency’s Porn Problem

ABC News’ Matthew Jaffe reports:

SEC boss Mary Schapiro today expressed “disgust” with her agency’s porn problem and vowed to deal with such misconduct “swiftly and severely” after watchdog David Kotz revealed in a recent report that 33 workers in the past five years have been caught looking at porn on the job.

“I really am so appalled at those findings by the inspector general because it wasn’t just one or two people,” said Sen. Susan Collins, the ranking Republican on the Appropriations Subcommittee on Financial Services & General Government, at this afternoon’s hearing.

“I completely share your disgust with this conduct,” replied Schapiro. “It is unacceptable at the Securities & Exchange Commission or anywhere else. We will deal very swiftly and very severely within the remit of the federal employment rules and laws with anybody who abuses SEC resources.”

However, Kotz said in a letter to Sen. Chuck Grassley on Tuesday night that of those 33 cases the only people fired by the agency were five contractors. Eight employees resigned. The remaining 20 employees are still employed by the agency, with three of them still awaiting disciplinary action.

“Last week I put out a message to all employees making it clear that anyone who abuses SEC resources in this manner, misuses them, will be subject to termination, so we will deal with this swiftly and severely and all employees are clearly on notice with respect to that,” Schapiro said. “Many of these actions were a number of years ago and disciplinary actions have already been taken at one level or another, but we have significantly ramped up the potential penalties.”

In that email to employees last Friday, Schapiro warned that “any person who violates our clear rules against this inappropriate use of the internet faces termination of employment.”

Schapiro did point out that “it was the agency’s own filter that detected the activities” and “a number” of the cases involved “outside consultants.”

Also at today’s hearing Collins asked Schapiro to respond to questions raised by Republicans that the SEC’s charges against Goldman Sachs may have been timed to boost Democrats’ calls for Wall Street reforms right as the Senate started to take up the proposals.

“Absolutely not and I put out a statement to try to make that quite clear that,” responded Schapiro. “We don’t time our enforcement actions by the legislative calendar or by anybody else’s wishes. We bring our cases when we have the law and the facts that we believe support bringing our cases and that is exactly what happened here.”

- Matthew Jaffe