Help Close the SEC’s Revolving Door

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Michael Smallberg

Michael Smallberg, Project on Government Oversight
(Credit: Pam Rutter)

The often cozy relationship between financial regulators and the institutions they monitor is no secret, and a recent report on the Securities and Exchange Commission by a government watchdog group makes a compelling case for limiting the flow of industry insiders between the public and private sectors. The report by the Project on Government Oversight (POGO) takes a look at dozens of examples where an SEC employee’s job before or after working at the agency created a conflict of interest that may have influenced the agency’s ability to regulate.

We asked Michael Smallberg, author of the POGO report, for his suggestions on what concerned citizens can do to help close the revolving door. Start by reading Chapter 9 of his report, outlining the reforms he thinks are needed, or reading our Q&A with him. Then, consider taking a few of the actions he recommends below.

Take Action

  • Contact the White House and urge them to recruit senior officials from a wider array of backgrounds, not just those who have experience representing corporate interests.

  • Contact congressional representatives and senators and urge them to enact tougher rules to slow the revolving door between government and industry.

  • Contact other financial regulatory agencies beyond the SEC (e.g., the Treasury Department, the Federal Reserve, the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corproration (FDIC)) and urge them to enforce the rules and provide more transparency about who goes through the revolving door and the work that agency alumni do for regulated businesses. Smallberg says that one first step regulatory bodies could take would be to publish post-employment disclosure statements online so the public and the press could see which companies employ former regulators, making revolving door politics more transparent.

  • The SEC and other agencies are still in the process of implementing dozens of rules under the Dodd-Frank Act. If there are specific issues that you feel strongly about, you can read through the rules and submit an official comment to the SEC, the Commodity Futures Trading Commission (CFTC), the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC) and the Financial Stability Oversight Council. Large industry groups, instead of individual citizens, tend to dominate this part of the process.

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  • patti

    Thanks for this valuable information and for helping the common citizen become more involved!

  • Yel Low

    Frustration grows as every Federal or State agency you try to get action from are ripe with incompetency, complacency, and no accountability. In my opinion, we are (or about to become) a “Third World” country. The Corporations and Wall St. rely on it. The Private sector is even worse or as bad as the Public Sector. If I had to guess, I would say that the most far reaching theme across the board is that “ethics” and “morality” is at the core of all this. Now more of Elizabeth Warren is needed in our Congress. Hopefully, she will be the one to run for President rather than a Hillary Clinton (who is just more of the same shameful politics). Social engineering and “racism” is destroying our country because everybody is afraid to call “a spade a spade” (excuse the pun). Regulatory and enforcement agencies must be made to enforce the laws, and/or, rewrite the laws and rules to ENSURE fairness and end corruptive, duplicitous behavior all for the sake of money schemes. In the long run, everyone benefits making sure that the “playing field” is fair for ALL people. This would grow the middle class exponentially, and the result will be a booming economy and debt reduced to nothing in no time.

  • Chris Tobe

    One way to get the SEC working is to enforce Dodd-Frank and get the whistleblower program going see

  • Kris Rosvold

    Noted that the Contact links onthe SEC page have ALL been disabled…I don’t think OUR government wants to hear from US (unless you happen to have a spare $10 Mil laying around)…..Can we PLEASE start the revolution now? I’ll build the Guillotine…

  • Kris Rosvold

    “Frustration grows as every Federal or State agency you try to get action
    from are ripe with incompetency, complacency, and no accountability.”

    You forgot: treason, bribery, and collusion….

  • Kerrie B. Wrye

    Can a petition get set up?

  • JR

    The contact form on the Senate Banking Committee’s website is not the only thing that’s broken. I just finished reading Jeff Connaughton’s book “The Payoff”, which is another narrative in a series of books describing D.C.’s inability to govern on behalf of the American people.

  • Joe Padden

    Wolf argued against regulation then lamented the repeal of Glass Steagall.

    I think we need to reinact Glass Steagall

    Great program!!!!!!!

  • Mark

    there are plenty of antitrust laws that are not enforced.

    the most effective action is to patition for filing a class action antitrust suit