Thursday, May 17, 2012

FDIC Watchdog Asked to Take Over Troubled SEC Office

This makes it hard to invest in public stocks. Aivars Lode

By Joshua Gallu 

May 17, 2012 12:23 PM ET

Federal Deposit Insurance Corp. inspector general Jon Rymer is in final discussions to temporarily take over the Securities and Exchange Commission’s internal watchdog office as it grapples with allegations of possible misconduct by its own employees, according to people with knowledge of the talks.
Rymer would take over the post on an interim basis as the SEC looks to fill the inspector general job that was left vacant when H. David Kotz stepped down in January, said the people, who declined to be identified because the decision hasn’t been made public. The move isn’t yet final, the people said.

The office has been in turmoil since David Weber, an employee of the internal watchdog unit, complained to the SEC that possible conflicts of interest related to Kotz’s past conduct could have tainted the integrity of his reports on the agency’s failure to catch the Bernard Madoff and R. Allen Stanford frauds. The agency said it is hiring an independent investigator to review the claims.

Weber was later placed on administrative leave after some of his co-workers said they were bothered by his suggestions that he and others should be able to carry guns on the job, people with direct knowledge of the situation said.

Last week, SEC Chairman Mary Schapiro scrapped a plan to have Donald Hoerl, head of the SEC’s Denver office, temporarily run the office after some Capitol Hill staff members expressed concern that Hoerl wouldn’t be independent enough from the commission, the people said. Noelle Maloney, the deputy inspector general, has been the acting head of the unit since Kotz’s departure.
Audit Committee
Rymer, a certified internal auditor who previously worked at accounting firm KPMG LLP, has been inspector general of the FDIC since July 2006. He also serves as chair of the audit committee of the Council of the Inspectors General on Integrity and Efficiency, according to the FDIC’s website. Rymer holds degrees from the University of Tennessee and the University of Arkansas and also graduated from the U.S. Army’s Inspector General School. He has served for 29 years in the Army, including active and reserve duty.

Fred Gibson, the FDIC’s deputy inspector general, said Rymer wasn’t immediately available for comment. SEC spokesman John Nester declined to comment.

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