SEC OIG – Investigation of Failure of SEC's LA Regional Office to Uncover Fraud in Westridge Capital Management

by Sabrina I. Pacifici on February 15, 2011

Investigation of the Failure of the SEC’s Los Angeles Regional Office to Uncover Fraud in Westridge Capital Management Notwithstanding Investment Adviser Examination Conducted in 2005 and Inappropriate Conduct on the Part of Senior Los Angeles Official, Case No. OIG-533 [redacted, dated October 26, 2010 and released February 2011]

  • “In all, the OIG searched over 68,000 e-mails. We obtained and reviewed e-mails for the period from January to May 2005 for all examiners who had any involvement with the 2005 Westridge IA examination. We also obtained and reviewed all e-mails for the period from February 2009 to August 2009 for examiners who worked on either the 2009 Westridge IA examination or the 2009 WG Trading BD examination.”
  • See also Written Testimony of H. David Kotz Inspector General of the Securities and Exchange Commission Before the Subcommittee on Financial Services and General Government, Committee on Appropriations, U.S. House of Representatives, Thursday, February 10, 2011: “The Office’s investigations unit has conducted numerous comprehensive investigations into significant failures of the SEC in accomplishing its regulatory mission, as well as investigations into allegations of violations of statutes, rules and regulations, and other misconduct by Commission employees and contractors. Several of these investigations involved senior-level Commission officials and represent matters of great concern to the Commission, Congressional officials and the general public. Where appropriate, we have reported evidence of improper conduct and made recommendations for disciplinary actions, including removal of employees from the Federal service, as well as recommendations for improvements in agency policies, procedures and practices.”
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