SEC Watchdog Cites Report as Proof He’s Not a Security Threat

David Weber, a U.S. Securities and Exchange Commission internal watchdog who was put on leave after co-workers accused him of being a security threat, is asking to be reinstated after an independent review indicated the claims were unsubstantiated.

“We call on the agency to publicly disavow the allegations and return David Weber to work,” his attorney Cary J. Hansel said today in a statement. Weber took over the job of chief investigator of the SEC’s inspector general’s office last year and was put on leave in May.

Weber stepped into the fray in March when he reported to the SEC commissioners that H. David Kotz, the agency’s former inspector general, may have had a personal relationship that tainted reports on the agency’s failure to catch the Bernard Madoff and R. Allen Stanford Ponzi schemes.

He also outlined concerns about then-deputy inspector general Noelle Maloney’s failure to report the misconduct, and separately reported possible espionage by foreign nationals related to a case he investigating that involved unencrypted computer hard drives that contained sensitive stock exchange information.

Weeks later, a number of his co-workers submitted complaints that he was creating a hostile work environment through his suggestions that he and others should be able to carry guns on the job. The SEC used an external security consultant to review whether Weber was a threat and then placed him on administrative leave.

Outside Review

An outside review generated by Weber’s complaints was led by David Williams, the inspector general of the U.S. Postal Service. Williams investigation, which found that Kotz appeared to have conflicts of interest in two matters, didn’t unearth any evidence to indicate that Weber’s conduct raised security concerns, according to the probe’s final report.

Hansel said his client is prepared to file a lawsuit alleging the agency retaliated against him for reporting the issues.

“The SEC is forcing him into a posture where he’s going to be a plaintiff instead of an investigator,” Hansel said in an interview. “It’s not what he wants, but it’s the only choice they’re giving him.”

Kevin Callahan, an SEC spokesman, didn’t respond to a phone call and e-mail seeking comment.

To contact the reporters on this story: Joshua Gallu in Washington at jgallu@bloomberg.net

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

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