More On Legal & Compliancefrom The Advisor's Professional Library
- Regulatory Oversight of Investment Advisors Although the regulatory environment is in a state of flux, it is imperative that RIAs adhere to their compliance obligations. To ensure compliance, RIAs and IARs must fully understand what those obligations are.
- Agency and Principal Transactions In passing Section 206(3) of the Investment Advisers Act, Congress recognized that principal and agency transactions can be harmful to clients. Such transactions create the opportunity for RIAs to engage in self-dealing.
The Securities and Exchange Commission on Tuesday said that its inspector general, H. David Kotz, will leave the agency at the end of January to become the managing director in the Washington office of the private investigative services firm Gryphon Strategies.
Kotz, who will conduct corporate fraud investigations as well as assist whistleblowers in exposing fraud and improving government accountability at Gryphon, was appointed as the SEC’s IG in December 2007.
SEC Chairman Mary Schapiro (left) said in a statement that Kotz’s “work helped us to identify areas where we needed to improve the way we operate, bolster our resources, and upgrade our technology.”
One of Kotz’s more recent reports, for instance, was the September 2011 report regarding conflicts of interest in the Bernie Madoff Ponzi scheme case, specifically as they related to former SEC general counsel David Becker. Kotz said in his report that Becker “participated personally and substantially” in particular matters in which he had a personal financial interest because his mother’s estate included an account managed by Madoff.
Kotz went on to say in the report that after extensive investigation, his office found “Becker played a significant and leading role in the determination of what recommendation the [SEC] staff would make to the Commission regarding the position the SEC would advocate as to the determination of a customer’s net equity in the Madoff Liquidation.”
Over the past four years, Kotz said in a statement that the reports the IG’s office has “issued have not only been significant to the agency, Congress and the investing public, but they have also directly resulted in a transformation of many of the divisions and offices of the Commission.” While Kotz said he will “miss doing this important work, I am gratified knowing that nearly every aspect of the SEC has been significantly improved in the four years since I was named Inspector General.”
Kotz previously served as the Inspector General of the Peace Corps and worked in several other senior level capacities for the U.S. Agency for International Development. Prior to his government service, Kotz practiced at private law firms, including Pepper Hamilton LLP in Washington D.C. Kotz graduated cum laude from the University of Maryland in 1987 with a Bachelor of Arts degree in government and politics, and earned his law school at Cornell Law School in 1990.