Federal prosecutors are investigating whether two Securities and Exchange Commission enforcement lawyers violated insider-trading laws, a potential scandal at an agency normally the pursuer in such cases.
A report by the SEC's inspector general described multiple suspicious cases where the lawyers traded the stocks of companies around the time the companies were under investigation. The report concluded the lawyers had violated the agency's internal rules, and the case was taken up by the U.S. attorney's office in Washington, D.C., and the Federal Bureau of Investigation.
The report didn't identify the employees. One, who the report said had been with the SEC since 1981, is a female staff lawyer, according to people familiar with the matter. The report said the other is a man who works in the enforcement division's chief counsel office, a key position that vets all cases, ensures consistency across the division, and often offers advice to attorneys.
The two plus another enforcement lawyer had a "standing lunch" on Monday where they often discussed stocks and financial markets, according to the report. It said one made more than 200 trades over two years.
Who wants to bet that the "standing lunch," and its purpose, was as generally well known at the SEC as Aldrich Ames' Jaguar was known at the CIA?
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