Wall Street regulators spent hours watching porn instead of monitoring crisis
Senior watchdog officials spent hours viewing pornographic material on US government computers when they should have been regulating Wall Street during the worst fiscal crisis since the 1930s.
An internal report by the Securities and Exchange Commission concluded that more than 30 officials were investigated for accessing explicit images on work computers – 17 of those were senior staff earning between $100,000 and $222,000 per year.
The worst offenders were caught accessing thousands of images, spending up to eight hours a day looking at pornography and burning the inappropriate material on to scores of CDs and DVDs kept in boxes at the regulator’s offices.
Republicans accused SEC officials of being “preoccupied with other distractions” when they should have been overseeing the growing problems in the financial system.
Darrell Issa, the senior Republican on the House Oversight and Government Reform Committee, said it was “disturbing that high-ranking officials within the SEC were spending more time looking at porn than taking action to help stave off the events that put our nation’s economy on the brink of collapse”.
The SEC’s internal watchdog conducted 33 probes of employees looking at explicit images in the past five years. A memo, which emerged last night, says 31 of those probes occurred in the two and a half years since the financial system was destabilised by the collapse of sub-prime mortgage investments.
The memo, written by David Kotz, the SEC Inspector General, summarises some of the most egregious offences. One 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 after being investigated.
An accountant was blocked more than 16,000 times in a single month by an internet filter that prevented him from entering pornographic websites. Despite repeated automated refusals, he still amassed a collection of “very graphic” material on his hard drive.
Another accountant — a woman — attempted to explicit websites 1,800 times in a fortnight. She was found to have 600 pornographic images on her computer hard drive The number of cases at the SEC, which is responsible for maintaining stable and orderly financial markets, increased from two in 2007 to 16 in 2008.
John Nester, an SEC spokesman, said that each of the offending employees has been disciplined or is in the process of being disciplined, and some have already been suspended or dismissed.
“We will not tolerate the transgressions of the very few who bring discredit to their thousands of hardworking colleagues,” he said.
