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SEC settles suit by fired inspector

The Securities and Exchange Commission has reached a

The Securities and Exchange Commission has reached a settlement with a former assistant SEC inspector general who accused the agency of firing him in retaliation for bringing possible misconduct to light. (May 3, 2013) Photo Credit: Getty

The Securities and Exchange Commission is paying $580,000 to settle a lawsuit by a former assistant SEC inspector general who accused the agency of firing him in retaliation for bringing possible misconduct to light.

The SEC reached the settlement last month with David Weber, who sued the agency in November. His attorney, Cary Hansel, announced the settlement Monday. Weber was assistant inspector general for investigations, one of those who probe allegations of misconduct by SEC officials and employees. He is an attorney and a certified fraud examiner.

Weber had raised concerns about possible inappropriate relationships between former SEC inspector general David Kotz and women he worked with on probes of the Ponzi schemes run by Bernard Madoff and Allen Stanford. Weber also warned of a security flaw in some SEC computers that contained sensitive stock-exchange data.

Kotz left the SEC in January 2012 and has denied the allegations. He didn't return a call seeking comment Monday.

SEC spokesman John Nester said the settlement "resolves the matter to everyone's satisfaction."

A lengthy report by the U.S. Postal Service inspector general's office, provided to the SEC in September, found that Kotz's relationships with the women created potential conflicts of interest. It also found merit in Weber's concerns of a potential security breach caused by the lack of encryption in some SEC computers containing sensitive stock-exchange data.

The SEC has said the computer problem has been corrected.

Weber was put on paid administrative leave in May 2012 after some colleagues complained he created a hostile workplace, talking about wanting to bring a firearm to work and a bulletproof vest to the office. He was fired in October.

The Postal Service IG's report did not find that Weber created a hostile work environment or engaged in threatening behavior in the office. However, the report appeared to find some merit in two complaints against Weber that involved management issues.

In his settlement with the SEC, Weber also got the right to be reinstated in his job, though he does not wish to return to the agency, Hansel said in a phone interview. -- AP

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