Financiers Used “Hotline” to SEC Examiners

“When you [a business subject to examination] speak with staff on the Examination Hotline, you may identify yourself or request anonymity,” the brochure says.

When it was first set up in 2006, the hotline routed directly into the OCIE Office of the Chief Counsel – the internal lawyer for OCIE. The OCIE chief counsel reports directly to the OCIE director.

An August 2007 report by the nonpartisan investigative arm of the legislative branch, the Government Accountability Office (GAO), criticized the design of the hotline.

According to the GAO report, some of those who might otherwise use the hotline would be concerned about receiving unfair treatment from OCIE if they complained.

The GAO report does not address the issue of possible misuse of this direct line of communication from industry to top SEC officials.

However, the GAO recommended putting up a barrier so the hotline would rout to an independent ombudsman, as is the practice at other regulator entities.

“By locating the hotline in an office or division that is independent of OCIE, OCIE could lessen registrants’ concern about the independence of that staff who operate the hotline and thus encourage greater use of it,” the report says on page 29.

Matt Renner is an editor and Washington reporter for Truthout. He can be reached at

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