Senator Presses SEC Over Decision to Put Investigator on Leave

U.S. Senator Charles Grassley is pressing the Securities and Exchange Commission to explain how the agency decided to place the chief investigator in its inspector general’s office on leave over concerns he posed a threat to other employees.

In three letters sent today, including one to SEC Chairman Mary Schapiro, Grassley, of Iowa, asked for a copy of the “security threat evaluation” that was used to exclude the investigator, David Weber, from the SEC’s offices. Grassley, the senior Republican on the Senate Judiciary Committee, also requested details on any complaints that were filed about Weber.

Weber was suspended last week after some of his co-workers said they were bothered by his suggestion that he and other employees in the watchdog office seek authorization to carry guns as part of their jobs. The concerns were raised after Weber reported allegations about the conduct of former Inspector General H. David Kotz to an outside group for review.

Weber’s complaint, filed in late March, could cast doubt on the integrity and independence of Kotz’s investigations into the SEC’s failure to catch the Bernard Madoff and R. Allen Stanford Ponzi schemes, according to people familiar with the matter.

The brouhaha has prompted Schapiro and the other four SEC commissioners to look for an independent attorney to review the allegations. They are also seeking a person unaffiliated with the SEC to run the inspector general’s office on a temporary basis.

Along with Schapiro, Grassley sent letters to Acting Inspector General Noelle Maloney and Chuck Tobin, the president of At-Risk International LLC, the firm that conducted the security review. The senator asked them to respond by May 21.

SEC spokesman John Nester declined to comment as did Weber’s attorney, Christopher Mead. Tobin and Maloney didn’t immediately return calls.

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To contact the reporter on this story: Robert Schmidt in Washington at rschmidt5@bloomberg.net.

To contact the editor responsible for this story: Maura Reynolds at mreynolds34@bloomberg.net.