Saturday, April 24, 2010

SEC Doing What?

The Securities and Exchange Commission has had a rough decade. Once viewed as the brightest star in the U.S. government agency constellation, the SEC has been its own worst enemy as news keeps spilling out that causes pause. The luster has certainly dimmed. Against the backdrop of egregious misses on Bernie Madoff and Allen Stanford, enormous ponzi schemers, news yesterday indicates that SEC employees were "distracted" at work in recent years. Apparently, viewing pornography while on the clock and using government computer equipment to do so is a routine practice by some at the SEC. The Agency is tasked with protecting investors and ensuring the integrity of the U.S. capital markets.

How surfing porn fits into these objectives is difficult to imagine.

19 comments:

  1. The SEC has come under major scrutiny over the past several years and this new information adds to it. Although I am not condoning participating in unrelated work escapades while at work, these things usually happen. Individuals at work usually pay bills, online shop, buy tickets, or plan vacations and these activities may not be work related. I perceive the SEC as the corporate police, making sure no illegal activities occur in the corporate world. However, like the police, some illegal activities are bound to be overlooked. The SEC employees viewing pornographic material while at work should be punished. However, we should ask ourselves are we punishing them for the material or the activity?

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  2. I agree with Mr. Williams in regards to the fact that the SEC employees should not be engaging in these types of activities while working. However, I do not believe that these activities are the reason why the Bernie Madoffs of the world are making a mockery out of investors as well as the SEC. The SEC should adopt stricter guidelines in order to monitor fraudulent behavior. They should implement triggering programs that automatically launch an investigation by the SEC on the happening of some event that may appear to be fraudulent. Yes, this will probably no be warmly accepted by some, but the SEC responsibility is to protect the investors not some people inconveniences

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  3. I agree they most definitely should be punished for their behavior. I was just reading an article now and it said that a “senior attorney at the SEC’s Washington headquarters spent up to eight hours a day looking at and downloading pornography. When he ran out of hard drive space, he burned the files to CDs or DVDs, which he kept in boxes around his office.” This behavior is unprofessional, especially coming from an attorney. Strict action needs to be taken against these employees so a message is sent out that we will not tolerate this behavior. I sure wouldn’t like to think that my hard earned tax payer money is helping to pay their salaries. Government computers need to be more strictly monitored in the future, maybe better firewalls to block out this inappropriate content.

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  4. As a former IT professional, I never understood how people, particularly attorneys, would use the corporate email system (including the corporate internet) as if it's their personal computer. Even more baffling, is why a senior attorney, viewing pornographic material, uploading and downloading, using the corporate internet, would not realize that he would be held accountable for it. Did he think he reasonably would have an expectation of privacy or did he think he was so untouchable that he was above the law? To Mr. Wiliams' point above, yes, the tendency for employees is to use the internet for personal uses such as to pay bills and make purchases. However, the activity is not what they're being paid to do while at work. Further, some sites are just extremely out of the scope of internet activity that would be considered routine practice (i.e., porn). I don't advocate totalling "locking-down" the internet usage to where even getting to shopping/travel sites and personal email is prohibited but there should be a ban (and punishment) on viewing pornography on a firm's computer system. So while they're supposed to be the Wall Street watchdogs, who's watching them? To respond to Mr. Williams' question, I believe there should be punishment for both the activity and the material. However, the punishment should fit the crime, i.e., less lienency for those that view pornography on the firm computer. I guess he couldn't wait until he got home.

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  5. Drew Sietsma –
    A Newsweek Article from November of 2008 reported that up to one quarter of employees who use the Internet visit porn sites during the workday. The adult industry has reported that more visits to their web sites occur during work hours than at any other time of the day. The SEC investigation has uncovered 33 employees out of 3800 that surfed for porn during work hours on government-issued computers. This figure is less than 1% compared to 25% of the larger working community. While the SEC definitely missed some very large indications of corporate wrong-doing, I do not believe that the rare instances of porn surfing accounts for and explains the fundamental break down of effective monitoring of the financial sector. The issues which brought about the current recession run much deeper than the random employee misconduct. While I don’t approve of this type of conduct and thought the conduct seems particularly egregious in light of the SEC’s mission of policing the financial sector, I believe the perpetrators should be punished but the SEC’s reputation should not be overly diminished for the indiscretion of the few. The reports of porn surfing serve only to distract from greater concerns: “How is it that egregious financial misconduct was not caught?” and “what can be done to ensure that future financial misconduct is punished prior to growing to astronomical proportions?”

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  6. I agree with Drew on this. My generation 18-25 year olds are only getting more distracted with more and more social networking sites and Blackberry/iPhones.
    The trend will only get worse.
    Companies have to be careful, however, not to mess with employees privacy and expression rights when trying to curve this issue.

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  7. While this generation is becoming more and more distracted with the various advances in technology, I cannot seem to comprehend why the SEC, a government regulatory agency, cannot seem to regulate their own employees? These "distractions" occur in every segment of society and are a part of everyday lives. But, part of being a professional is knowing when to set aside the distractions and focus on the task at hand.

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  8. Michael RosenbergApril 28, 2010 at 9:28 AM

    First, what kind of people are the SEC hiring that would ever think that it was appropriate to look at porn while at work? When I was working as a paralegal at a large firm in Chicago, I would have fired anyone on the spot if they were looking at porn. There is no excuse for wasting company time and resources to download/view porn. In fact, there should be (and I believe are) systems in place to monitor and notify the IT department of this type of behavior.

    I find it hard to believe that you would be infringing on any constitutional rights. You are using company resources (computer, internet access, electricity, etc.) while being paid to do a certain job. Unless it is in your job description, this behavior should not be tolerated.

    With that said, I don't think that you can label every SEC worker as a porn viewer. I imagine that there are a lot of hard working individuals there. But, with so much bad press about the SEC falling behind on enforcement, I suppose this might be why...

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  9. Although I find it disturbing, I don't believe this seriously effects the SEC's reputation. Yes, there will be late night and political pundits taking shots at them but as long as they can capture a big fish,ex.Goldman Sachs, here and there, this story will disappear in the public's eye. The real question is what has happened to professionalism? Are we so desensitized that we can cannot comprehend what is professional and what is clearly outside the lines? These stories are becoming rampant everyday.

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  10. According to CBS:

    "A senior attorney at the SEC's Washington headquarters spent up to eight hours a day looking at and downloading pornography. When he ran out of hard drive space, he burned the files to CDs or DVDs, which he kept in boxes around his office. He agreed to resign, an earlier watchdog report said."

    Also according to CBS:

    "An accountant was blocked more than 16,000 times in a month from visiting websites classified as "Sex" or "Pornography." Yet he still managed to amass a collection of "very graphic" material on his hard drive by using Google images to bypass the SEC's internal filter, according to an earlier report from the inspector general. The accountant refused to testify in his defense, and received a 14-day suspension."

    OK these individuals are actually addicted to porn and they need to seek professional assistance. I feel bad for them.

    However, in terms of the SEC, we cannot consider just a handful of individuals in a large governmental organization as in any way indicative of the SEC "culture." To me, this is nothing more than another sensational story that people can cite when attacking a beleaguered organization. As Drew stated in his comment, above, "I do not believe that the rare instances of porn surfing accounts for and explains the fundamental break down of effective monitoring of the financial sector."

    Let's remember to keep this story in perspective. Unless further details emerge with something more substantial (e.g., 25% of SEC employees view 25+ hours per week of pornography on their work computers), it's essentially a non-story. It's as much TMZ as it is ABC.

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  11. -Anthony Gonzalez

    WOW at Jules V's post...8 hours a day! Where's the supervision? That's pretty much just making a mockery of the agency at that point.

    Now, as Oleseun Williams posted, it seems to be the norm for an employee to attend to private matters on company time and usually with company equipment, and as long as it isn't in a disrespectful manner I don't have much of a problem with it. However, the SEC stands in a league of it's own and shouldn't be allowed the standards or norms of the average organization; they should be held to a higher standard.

    First off, they enforce laws, albeit securities laws, but nonetheless they are a Government agency with a primary purpose of enforcing laws. They should make it an utmost priority to maintain a professional reputation. Secondly, this is an agency that has had a rough decade, and as a result, they should be running more of a tight ship to minimize any further negativity.

    Bottom line, unless the SEC feels that it is within their employees' job descriptions to personally contribute an excess amount of energy and attention to the Pornography market to ensure that it's stocks are healthy, they should make an example of these employees and make it clear to the public that they are taking care of business.

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  12. Well, lets see, we have been through the worse financial crises in the last year since the 1930s, we have a ponzi scheme that stole millions of people's hard earned money, Goldman Sachs is hiding European debt, large investors were manipulating stock prices of certain financial institutions, unemployment is hovering around 10%.......Well the SEC may not not be working on keeping the integrity of the capital markets or themselves, but at least they have an answer when asked what do they do all day.

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  13. Candace Cronan

    The big news that the SEC was filing charges against Goldman Sachs has dominated headlines. However, on the same day they filed charges, a report on the SEC's activiy from 1997-2005 was announced and the SEC would prefer that everyone forget about it.

    The SEC issued a press release about that report which stated:

    "This report recounts events that occurred at the Commission between 1997 and 2005. Since that time, much has changed and continues to change regarding the agency's leadership, its internal procedures and its culture of collaboration. The report makes seven recommendations, most of which have been implemented since 2005. We will carefully analyze the report and implement any additional reforms as necessary for effective investor protection."

    But this is absurd- the debate on financial reform is just beginning and what the SEC fails to recognize is that the problem has NOT been fixed.

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  14. I do not believe this type of activity at a federal government agency is too hard to imagine. We have been ingrained to believe that certain agencies or terms equate to an institution as credible or professional. Reality almost always seems to show different than our natural inclinations. My argument here deals with the size of the SEC. On the one hand they do not have enough staff to catch violators in a timely manner. However, employees have time to surf the internet for porn. That is ridiculous. What is even more outrageous is that some of the postings seem to think that if they had been paying bills etc.. online than that would have been better. I do not care who watches porn. I do not care who pays their bills. What I do care about is that the SEC is being treated by big players in the industry as a calculated risk. Yeah they might catch me but I'm willing to do the time for the money. Remember, just because the SEC is able to seize the assets of these individuals it doesn't mean that they can actually get money that these very manipulative, smart and obviously corrupt people have hidden away. Until I see a fundamental change in the perception of Wall Street insider's and big market players towards the SEC I will refuse to believe that a new leadership in the agency is actually doing anything more than PR. It should not be right for an agency facing the blame for the events of recent years not to have a fully publicized apology. Further, its time to fire some people. I don't care who, so long as it's not the guys doing their job. I want to see some repercussions inside the agency. I'm a law student and I can guarantee you that if I was caught even trying to watch porn in class there would be some serious repercussions for me that might effect my career as well my education. I don't see the same mentality from the SEC.

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  15. We discussed in class that the government almost never acts in anticipation of future crimes and wrongs and almost always acts in response after a wrong has been committed and people have been wronged, so is it a surprise that the SEC, a governmental organization, seems to catch onto things late? it isn't a surprise to me. In 2004, 25% of total search engine requests were for pornographic material, and were shocked that employees at the SEC are doing it? It is searched on the internet just as much as CNN, TMZ, or any internet game, and it wastes just as much time as any of those, yet we are to make some big deal because its porn? its legal and just as distracting as any other site. So if you want to throw your arms up in the air about people on porn sites, drop your online scrabble and your cnn entertainment news fix because all are equally as distracting

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  16. I agree with Jamil. These types of activities on the tax payer’s dime are deplorable but I do not think they taint the SEC as a whole and will in time be forgotten. In every area of employment there are individuals who do not meet the standards of work place professionalism and those people should be dealt with accordingly. But I can not say that this is very shocking or uncommon. Maybe I am just callused after all of the other major blunders that Dre´ mentioned in his post.
    - Jonathan Haskell

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  17. Its very hard to maintain a level of trust that our country is in good hands at times. These are the very people that are supposed to be questioning the efficiency of certain corporations. While it is unfair to say that all the employees at the SEC partook in time wasting activities, it does place a certain image into the public eye. I understand that it was probably a very isolated incident but when our government is perceived as taking this financial situation lightly, it does not instill much confidence in its citizens that things are getting better. This is a PR black eye that hopefully will be forgotten with time.

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  18. SEC needs to be in the public eye. 10b5-2 passed in 2000. Yet they refuse to plead it in complaints. Had they plead this standard they could of caught Martha and several others alleged of insider trading. They refuse to do so however bc their worried they'll piss their buddies off at these large corp. Maybe if they weren't to busy satisfying their girl on broker fetishes they would of caught the change in the rules.

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  19. This blog reiterates my thoughts that, it's not the fact that we don't have laws in place, it's the lack of oversight in the govermental sphere. True, we're all adults and shouldn't have to be regulated like little children, but many,as we have seen, aren't. This is why it's important for supervisors to actually supervise or office managers, to actually manage. The government has enacted new legislation, to keep an eye on corporations, but words on paper are just words unless they are strictly adhered to. We had laws before that regulated companies, but they were/are more like dormant laws, because they are barely used to regulate!

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